Under the Initial Value Method, When Accounting for an Investment

Multiple Choice

Under the initial value method, when accounting for an investment in a subsidiary,

A) Dividends received by the subsidiary decrease the investment account.
B) The investment account is adjusted to fair value at year-end.
C) Income reported by the subsidiary increases the investment account.
D) The investment account does not change from year to year.
E) Dividends received are ignored.