Under the equity method of accounting, the receipt of a cash dividend is not recorded as dividend revenue. Instead the receipt of a dividend is recorded by crediting reducing the investment account of the company that paid the dividend. Considering the equity method of accounting is used only when a company has a greater then  ownership interest, why do you think the equity method does not allow for the recording of revenue when a dividend is received? 

Answer rating: 100% (QA)

The equity method of accounting is used when a company has significant influence over another comp... View the full answer