In holding companies dividends received out of profits of the subsidiary companies must be:

The correct answer is: B. Credited to investment account

A holding company is a company that owns a controlling interest in another company. When a holding company receives dividends from its subsidiary companies, it credits the investment account. This is because the dividends represent a return on the investment that the holding company has made in the subsidiary companies.

The other options are incorrect because:

• Option A is incorrect because dividends received are not a cost of the investment.
• Option C is incorrect because dividends received are not revenue.
• Option D is incorrect because dividends received are not an expense.

I hope this helps! Let me know if you have any other questions.