The Longterm Investments account is debited for the receipt

The Longterm Investments account is debited for the receipt of a dividend on an equity method investment because the dividend increases the investee\'s equity.

True

False

Solution

Answer: False

Explanation to the answer:

Under the equity method ,the Longterm Investments account is credited and not the debited for the receipt of a dividend

Because under equity method investment , the dividend decreases the the stock investment account in investee\'s equity.