Cash dividends declared out of current earnings are distributed to an investor. How will the investor’s investment account be affected by those dividends under each of the following accounting methods?
|
Cost Method |
Equity Method |
|
|
a |
Decrease |
No effect |
|
b. |
Decrease |
Decrease |
|
c. |
No effect |
Decrease |
|
d. |
No effect |
No effect |