Which Statement Is Not Correct About the Equity Method

Which statement is not correct about the equity method?

A) The investment account on the balance sheet equals the original cost plus the investor's share of the investee's post-acquisition changes in net assets.
B) This method results in reflecting two legal entities as one economic unit for financial reporting purposes.
C) Income is recognized equal to the investor's share of the investee's net income.
D) Dividends from the investee are deducted from the investor's investment account.

Correct Answer:

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