The equity method of accounting for investments in common stock

Asked by admin @ in Business viewed by 279 People

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 asA deduction from the investor's share of the investee's profits.A deduction from the investment account.A deduction from the stockholders' equity account, Dividends to Stockholders.Dividend income.

Answered by admin @


Answer:

The correct option is deduction from the investment account

Explanation:

In an equity method, the firm analyzes the profits which are earned by investing in other firms. The accounting is done in two ways:

1. Income from the investment is shown in the firm income statement

2. And, the value which is to be reported is shown in the firm balance sheet under the assets side

So, it won't be recorded as an investor profit, neither it would be recorded as a stockholder equity account as it is a separate account, nor it would be recorded as a dividend income.

Therefore, the correct option is a deduction from the investment account


Similar Questions

Method of evaluating capital investment proposals that ignore present value

Asked by admin @ in Business viewed by 283 persons

Which of the following are present value methods of analyzing capital investment proposals? a. internal rate of return and average rate of return b. average rate of return and net …

The following are all methods of analyzing capital investments except

Asked by admin @ in Business viewed by 331 persons

Which of the following two methods are typically used for initial screening of​ investments, rather than for​ detailed, in-depth​ analysis? A. payback and accounting rate of return B. accounting rate …

What is the most common route for mnc investment

Asked by admin @ in Social Sciences viewed by 265 persons

What is the most common route for MNC'investment

Statistical methods are no substitute for common sense comment

Asked by admin @ in Economy viewed by 373 persons

Statistical methods are no substitute for common sense. Comment with examples from your daily life

Is a commonly used chemical method for purifying water

Asked by admin @ in Science viewed by 353 persons

1 point Q.5 _____ is a commonly usedchemical method for purifying water.O BrominationO FlourinationO FiltrationO Chlorination​

Can you have two investment accounts

Asked by maham237 @ in Business viewed by 288 persons

" You have your choice of two investment accounts. Investment A is a 13-year annuity that features end-of-month $1,100 payments and has an interest rate of 7.5 percent compounded monthly. …

One common advantage of a long term investment is

Asked by maham237 @ in Social Studies viewed by 365 persons

One common advantage of a long-term investment is higher return. lower risk. higher liquidity. lower liquidity

One common advantage of a long-term investment is

Asked by wiki @ in Business viewed by 406 persons

higher return. lower risk. higher liquidity. lower liquidity.

On the statement of partnership equity each partner's capital account

Asked by admin @ in Business viewed by 281 persons

Which of the following equations best represents the reporting shown in a statement of partnership equity? a.Beginning Balance of Partner Capital – Capital Additions – Net Income – Partner Withdrawals …

What is the most common method of carbon dioxide transport

Asked by admin @ in Biology viewed by 270 persons

What is the most common method of carbon dioxide transport? what is the most common method of carbon dioxide transport? dissolved in the plasma chemically bound to hemoglobin as carbaminohemoglobin …

What are the common methods of transmission of diseases

Asked by admin @ in Biology viewed by 258 persons

Give common methods of transmission of diseases

Stock is valued in the books of accounts at

Asked by admin @ in Accountancy viewed by 434 persons

Stock is valued in the books of accountsbased on:​

Which among the following is commonly called withdrawal method

Asked by admin @ in Biology viewed by 295 persons

Which among the following is commonly called withdrawal method? (a) Lactational amenorrhoea (b) Coitus interruptus (c) Periodic abstinence (d) Rhythm method

What is the most common delivery method for viruses

Asked by admin @ in Computer Science viewed by 256 persons

Which of the following is most common delivery method of viruses? (a) Portable media(b) Mail (c) Internet Download(d) Instant messenger​

A is invested by managers in a diversity of stocks

Asked by maham237 @ in Mathematics viewed by 392 persons

bonds, and other securities. A. series EE bond B. preferred stock C. mutual fund D. promissory note

Most viewed questions in Business

Foolproof module 9 test answers

Asked by maham237 @ in Business viewed by 3315 persons

Able, baker, and charles are engaged in the marketing to and enrollment of beneficiaries into medicare health plans. mr. able is an independent agent paid directly by a health plan. ms. baker is an independent agent paid through a field marketing organization (fmo). mr. charles is an independent agent paid for his work by a third-party marketing organization (tmo). how do the cms compensation rules apply to these three agents?

Asked by maham237 @ in Business viewed by 2735 persons

Interest rates are expressed as a percentage of

Asked by maham237 @ in Business viewed by 2104 persons

How to enhance knowledge regarding environmental factors through capsim?

Asked by wiki @ in Business viewed by 1645 persons

Match the job titles with the career clusters.

Asked by maham237 @ in Business viewed by 1477 persons

A company that allows you to license software

Asked by maham237 @ in Business viewed by 1285 persons

Lupe is ready to open a checking account

Asked by maham237 @ in Business viewed by 1281 persons

Mays and mccovey are beer brewing companies

Asked by maham237 @ in Business viewed by 1212 persons

What must be marked on ready to eat bags phfs

Asked by maham237 @ in Business viewed by 1170 persons

Coq six sigma

Asked by maham237 @ in Business viewed by 1136 persons

Henry ford was the first entrepreneur to implement which strategy

Asked by maham237 @ in Business viewed by 1083 persons

Your company was recently served with a lawsuit

Asked by maham237 @ in Business viewed by 1071 persons

Case study starting a business project schedules and curves edgenuity

Asked by maham237 @ in Business viewed by 1060 persons

Which two of the four cs of credit have to do with earning potential and available cash?

Asked by wiki @ in Business viewed by 980 persons

The total annual expenditures on advertising in the united states

Asked by maham237 @ in Business viewed by 966 persons