Why does the equity method record dividends received from an investee as a reduction in the investment account, not as dividend income?

As per the equity method, the investor do not treat dividend as revenue rather they record the receipt of dividend as a carrying value of investment.

Explanation:

As per the equity method, the investor do not treat dividend as revenue rather they record the receipt of dividend as a carrying value of investment. An investor´s account decrease as a dividend is collected, because distribution of cash dividend reduce the carrying amount of investee company.

The double entry for this transaction would be:

Dividend received Dr

Carrying amount of investmentCr

A parallel is established between investment account and the underlying activities of the investee.

answer; /// i believe the correct answer is ( column break);

the answer choices are:

provides online banking

provides automatic payment services

provides home loans by using saving accounts

accept tax return refunds

hopefully someone can answer the question now lol