Asked by
Yasmine Kasem
on Dec 16, 2024Verified
When using this, dividends are treated as a reduction of the investment
A) Debt securities
B) Equity securities
C) Investor
D) Investee
E) Cost method
F) Trading securities
G) Available-for-sale securities
H) Held-to-maturity securities
I) Equity method
J) Business combination
Equity Method
An accounting technique used to record investments in associate companies, recognizing the investor's share of the earnings as income.
Dividends
Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.
Investment
The action of deploying resources (such as capital) with the expectation of generating an income or profit.
- Comprehend the cost method and equity method of accounting for investments.
Verified Answer
RW
Learning Objectives
- Comprehend the cost method and equity method of accounting for investments.