When a company maintains its own records of stock transactions and outstanding stock, internal controls must be adequate to ensure that
A) actual owners are recorded in the bylaws.
B) the correct amount of dividends is paid to stockholders owning the stock on the dividend record date.
C) the correct amount of dividends is paid to stockholders owning the stock on the declaration date.
D) actual owners are recorded in the minutes.

Question

Quizplus · Accepted Answer

Internal controls must be adequate to ensure that the correct amount of dividends is paid to stockholders owning the stock on the dividend record date. This is because dividends are paid only to the stockholders on record as of the dividend record date, which is typically a few weeks before the dividend payment date. Internal controls must also ensure that all stock transactions are properly recorded and that the information regarding outstanding shares is accurate.

When a Company Maintains Its Own Records of Stock Transactions