Ch 14
1- Each of the following decreases retained earnings except a
a. cash dividend.
b. liquidating dividend.
c. stock dividend.
d. All of these decrease retained earnings.
2- Each of the following decreases total
...
Ch 14
1- Each of the following decreases retained earnings except a
a. cash dividend.
b. liquidating dividend.
c. stock dividend.
d. All of these decrease retained earnings.
2- Each of the following decreases total stockholders' equity except a
a. cash dividend.
b. liquidating dividend.
c. stock dividend.
d. All of these decrease total stockholders' equity.
3- Which one of the following is not necessary in order for a corporation to pay a cash dividend?
a. Adequate cash
b. Approval of stockholders
c. Declaration of dividends by the board of directors
d. Retained earnings
4- The date on which a cash dividend becomes a binding legal obligation is on the
a. declaration date.
b. date of record.
c. payment date.
d. last day of the fiscal year-end.
5- The effect of the declaration of a cash dividend by the board of directors is to
Increase Decrease
a. Stockholders' equity Assets
b. Assets Liabilities
c. Liabilities Stockholders' equity
d. Liabilities Assets
6- Common Stock Dividends Distributable is classified as a(n)
a. asset account.
b. stockholders' equity account.
c. expense account.
d. liability account.
7- The effect of a stock dividend is to
a. decrease total assets and stockholders' equity.
b. change the composition of stockholders' equity.
c. decrease total assets and total liabilities.
d. increase the book value per share of common stock.
8- Stock dividends and stock splits have the following effects on retained earnings:
Stock Splits Stock Dividends
a. Increase No change
b. No change Decrease
c. Decrease Decrease
d. No change No change
9- Regular dividends are declared out of
a. Paid-in Capital in Excess of Par.
b. Treasury Stock.
c. Common Stock.
d. Retained Earnings.
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