IIA Exam IIA-CIA-Part3-3P Topic 10 Question 53 Discussion

Actual exam question for IIA's IIA-CIA-Part3-3P exam

Question #: 53
Topic #: 10

Which of the following statements is true regarding an investee that received a dividend distribution from an entity and is presumed to have little influence over the entity?

AThe cash dividends received increase the investee investment account accordingly.

BThe investee must adjust the investment account by the ownership interest.

CThe investment account is adjusted downward by the percentage of ownership.

DThe investee must record the cash dividends as dividend revenue.

Show Suggested Answer

Suggested Answer: D

by Ardella at Sep 19, 2024, 12:39 PM

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Reita

3 months ago

I've got a good feeling about C. Reducing the investment account by the ownership percentage seems like the logical way to go here.

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Gail

3 months ago

Haha, I bet the answer is A. Increasing the investment account for cash dividends? That's just silly!

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Eve

3 months ago

Hmm, this is a tricky one. I'm going to go with B, the investee must adjust the investment account by the ownership interest.

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France

2 months ago

User 3: I'm not sure, but I think B) The investee must adjust the investment account by the ownership interest makes sense.

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Charisse

2 months ago

User 2: I disagree, I believe it's D) The investee must record the cash dividends as dividend revenue.

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Ryann

2 months ago

User 1: I think the correct answer is A) The cash dividends received increase the investee investment account accordingly.

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4 months ago

I think the correct answer is C. The investment account should be adjusted downward by the percentage of ownership to reflect the reduced investment value.

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