Revenue is recognized when cash dividends are received under both the cost and equity methods.

Here's why:

1. Cost Method: Under the cost method, an investor records its investment in another company at cost without any adjustments for changes in the investee’s income or equity. The investor only recognizes income from the investee when it receives dividends. Therefore, revenue is recognized when cash dividends are received.

2. Equity Method: Under the equity method, an investor recognizes its share of the profits and losses of the investee in the periods when these profits and losses are also reflected in the investee's accounts. However, the investor also recognizes revenue when it receives dividends from the investee.

So, under both the cost and equity methods, revenue is recognized when cash dividends are received.

Question

Revenue is recognized when cash dividends are received under both the cost and equity methods.

Here's why:

1. Cost Method: Under the cost method, an investor records its investment in another company at cost without any adjustments for changes in the investee’s income or equity. The investor only recognizes income from the investee when it receives dividends. Therefore, revenue is recognized when cash dividends are received.

2. Equity Method: Under the equity method, an investor recognizes its share of the profits and losses of the investee in the periods when these profits and losses are also reflected in the investee's accounts. However, the investor also recognizes revenue when it receives dividends from the investee.

So, under both the cost and equity methods, revenue is recognized when cash dividends are received.

Knowee AI · Accepted Answer

Revenue is recognized when cash dividends are received under both the cost and equity methods.

Here's why:

1. Cost Method: Under the cost method, an investor records its investment in another company at cost without any adjustments for changes in the investee’s income or equity. The investor only recognizes income from the investee when it receives dividends. Therefore, revenue is recognized when cash dividends are received.

2. Equity Method: Under the equity method, an investor recognizes its share of the profits and losses of the investee in the periods when these profits and losses are also reflected in the investee's accounts. However, the investor also recognizes revenue when it receives dividends from the investee.

So, under both the cost and equity methods, revenue is recognized when cash dividends are received.

Revenue is recognized when cash dividends are received under Group of answer choicesthe controlling interest methodthe cost methodthe equity methodboth the cost and equity methods.

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