Why does the equity method record dividends from an investee as a reduction in the investment account, not as dividend income?
Why does the equity method record dividends from an investee as a reduction in the investment account, not as dividend income?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Answer
The dividends are reported as a deduction from the investment account, not revenue, to avoid reporti…View the full answer
Related Book For 
Fundamentals of Advanced Accounting
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
ISBN: 978-0077862237