In the case of an investment in equity securities where the investor does not have significant influence and the investment is carried at fair value, a dividend from the investee is: Income to the investor in the period of declaration. A reduction of the carrying amount of the investment. A direct increase to retained earnings of the investor to offset the direct decrease to retained earnings of the investee. An expense to the investor in the period of declaration.

In the case of an investment in equity securities where the investor does not have significant influence and the investment is carried at fair value, a dividend from the investee is: Income to the investor in the period of declaration. A reduction of the carrying amount of the investment. A direct increase to retained earnings of the investor to offset the direct decrease to retained earnings of the investee. An expense to the investor in the period of declaration.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 12MCQ: When the market value of a companys available-for-sale securities is lower than its cost, the...

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QUESTION 9

In the case of an investment in equity securities where the investor does not have significant influence and the investment is carried at fair value, a dividend from the investee is:

		Income to the investor in the period of declaration.
		A reduction of the carrying amount of the investment.
		A direct increase to retained earnings of the investor to offset the direct decrease to retained earnings of the investee.
		An expense to the investor in the period of declaration.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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