Question: When an investor uses the equity method to account for investments in common stock, the investors share of cash dividends from the investee should be

When an investor uses the equity method to account for investments in common stock, the investor’s share of cash dividends from the investee should be recorded as

  a. A deduction from the investor’s share of the investee’s profits.
  b. Dividend income.
  c. A deduction from the stockholders’ equity account, Dividends to Stockholders.
  d. A deduction from the investment account.

Step by Step Solution

3.45 Rating (152 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The correct answer is b Dividend income The equity method is an accounting technique used by investo... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!