Question

An investor has a long-term investment in stocks. Regular cash dividends received by the investor are recorded as?

1) A reduction of the investment; A reduction of the investment
2) Income; A reduction of the investment
3) A reduction of the investment; Income
4) Income; Income

Answer 1

Regular cash dividends received by the investor are recorded as income.

Step-by-step explanation:

Regular cash dividends received by the investor are recorded as Income.

Dividends are direct payments made by a firm to its shareholders as a share of its profits. When an investor receives regular cash dividends, it is considered as income for the investor.