question archive If an investor owns 18% of an investee, a dividend from the investee is: Multiple Choice A direct increase to retained earnings of the investor to offset the direct decrease to retained earnings of the investee
If an investor owns 18% of an investee, a dividend from the investee is: Multiple Choice A direct increase to retained earnings of the investor to offset the direct decrease to retained earnings of the investee
Subject:FinancePrice:2.86 Bought3
If an investor owns 18% of an investee, a dividend from the investee is:
Multiple Choice
- A direct increase to retained earnings of the investor to offset the direct decrease to retained earnings of the investee.
- Income to the investor in the period of declaration.
- An expense to the investor in the period of declaration.
- A reduction of the carrying amount of the investment.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
- Income to the investor in the period of declaration.
Step-by-step explanation
If an investor owns 18% of an investee, a dividend from the investee is treated as Dividend Income in the period of Declaration as the investor does not have an significant influence as it holding is below than 20%, Hence any dividend received is recorded as dividend income.
