Question

Dividends received for equity securities in which the investor lacks the ability to participate in the decisions of the investee company are recorded with a debit to the Dividend Revenue account.A.TrueB.False

Answer 1

Answer:

False.

Explanation:

When the investor does not have decision- making power in the business, his dividend payment process is not different from any other shareholder.

When profits are declared the company debits Retained Earnings (profits) for the divedend amount, and credited to Dividends Payable.

Dividend Payable is then debitted and Cash will be credited to show money has gone out.