Under the equity method,the Equity-method Investment account is debited when the:
A)investee reports net income.
B)investee reports net loss.
C)investor receives a cash dividend.
D)investment is sold.

Question

Quizplus · Accepted Answer

According to the equity method, an investor records the share of earnings of the investee as an increase in the investment account. Therefore, when the investee reports net income, the Equity-method Investment account is debited.

Under the Equity Method,the Equity-Method Investment Account Is Debited When