When applying the rules of the equity method,the Long-term Investments account is credited for the receipt of a cash dividend because ________.

Question

Quizplus · Accepted Answer

Under the equity method, dividends received from the investee are considered a return on investment, thus reducing the carrying amount of the investment. Therefore, the Long-term Investments account is credited because the dividend decreases the investor's investment.

When Applying the Rules of the Equity Method,the Long-Term Investments