Choose the correct.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 as:  a. A deduction from the investor’s share of the investee’s profits.b. Dividend income.c. A deduction from the stockholders’ equity account, Dividends to Stockholders.d. A deduction from the investment account(AICPA adapted)

Q: Please show the different debits and credits to an investment account under the equity method of…

A: Equity method: Equity method is the method used for accounting equity investments which claim a…

Q: What are if any the differences between Stockholder's Equity, Retained Earnings, Common Stock,…

A: Owner’s equity is the difference between total assets and total liabilities. Owner’s equity is…

Q: Explain Liabilities and Stockholders' Equity?

A: Liabilities: Liabilities are debts and obligations payable by the corporation. A liability is a…

Q: Which of the alternatives results from the accrual of interest: a.Increase in liabilities and…

A: Expenses are accrued when these are incurred but are not paid. Due to the accrual concept, all the…

Q: Define each of the following terms:b. Common stockholders’ equity, or net worth; retained earnings

A: Common stockholders' equity or net worth: Common stockholders' equity or net worth is the capital…

Q: The equity method of accounting for investments requires a.the investment to be increased by the…

A:

Q: If a company uses the equity method to account for an investment in another company, which of the…

A: The equity method is used when a company has ownership in another company of 20% to 50% of the…

Q: Dividends Payable is classified as a O long-term liability. contra stockholders' equity account to…

A: Dividend payable are nearly always classified as short term liability or current liability as board…

Q: Which of the following stockholders' equity accounts follows the same debit and credit rules as…

A: Normally all assets and expense accounts in the books will have debit balance. All liabilities,…

Q: The receipt of dividends from long-term investments in stock in classified as a canh infow from…

A: The cash flow statement keeps the record of cash inflow or outflow from the business under various…

Q: The Equity Method of accounting for investments:     a)  Requires the investment asset to…

A: As per IAS 28, if any investment is made in associates and joint ventures, the equity method should…

Q: Share dividends distributable should be classified on the O income statement as an expense.…

A: Introduction;- A dividend is a share of company profits. Which is distributed to to its…

Q: Equity is generally classified into two major categories: Select one: a. earned capital and…

A: The equity consists of :   Earned capital: it is the Capital which is earned by company during the…

Q: Realized gains and losses on investments available for sale are reported a. as a current asset b.…

A: Realized gains and losses on investments available for sale are reported on the income statement…

Q: The numerator in the calculation of the ratio of liabilities to stockholders' equity is O a. Total…

A: c. Total Liabilities

Q: . Unrealized gains and losses on investments in trading securities are reported a. as a current…

A: Trading securities are securities that can be sold immediately in the open market. These securities…

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is