Under the equity method of accounting for stock investments, the Investment account is increased when the:

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Under the equity method, the investor reports its share of the investee's net income as an increase to the Investment account. Therefore, when the investee company reports net income, the Investment account of the investor is increased. The other options, such as payment of dividends or reporting a loss by the investee, may affect the investment's value, but they do not directly increase or decrease the Investment account. Selling the investment at a gain would result in a gain on the sale account and a decrease in the Investment account.

Under the Equity Method of Accounting for Stock Investments, the Investment