under the equity method of accounting for an investment a)the investment account remains at initial value b)dividends received are recorded as revenue c)goodwill is amortized over 20 yrs d)income reported by the subsidiary increases the investment account e)dividends received increases the investment account
Answer:
under the equity method of accounting for an investment
e)dividends received increases the investment account
Explanation to the above answer:
This method is used to account for company’s investment in another entity and it used when it has significant influence in another in another company. Any profit or loss recorded in the accounts of investee . So we could say that, if there is recognized profit increases the investment , on the other hand recognized loss decreases the investment
