Question

For each of the following numbered situations below, select the best letter answer concerning accounting for investments: (A) Increase the investment account. (B) Decrease the investment account. (C) Increase dividend revenue. (D) No adjustment necessary.

Answer 1

(A) Increase the investment account

Step-by-step explanation:

When the investment is made, the accounting entries required is to debit the Investment Account to shows the increase in Assets and credit the Cash Account to show the decrease in assets used to acquire the investment.