Asked by Jason Vowels on Jun 14, 2024
Verified
The investor carrying an investment by the equity method records cash dividends received as an increase in the amount of the investment.
Cash Dividends
Payments made by a corporation to its shareholders, usually as a distribution of profits in the form of cash.
Equity Method
An accounting technique used by firms to assess the profits earned by their investments in other companies by reporting these profits as income.
- Comprehend the accounting procedures for dividends and interest associated with investments.
Verified Answer
JA
Jonathan AbrahamJun 19, 2024
Final Answer :
False
Explanation :
Cash dividends received from an investment accounted for by the equity method are recorded as a reduction in the carrying amount of the investment, not as an increase.
Learning Objectives
- Comprehend the accounting procedures for dividends and interest associated with investments.
Related questions
Dividends Received on Stock Investments of Less Than 20% Should ...
On January 1 2017 Brenner Company Purchased at Face Value \(\begin{array}{llr} ...
Under the Equity Method the Receipt of Dividends from the ...
When Recording Bond Interest Interest Receivable Is Reported as a ...
The Journal Entry Pierce Will Record on June 30 Will ...