Fundamental Accounting Principles Study Set 5
Quiz 13: Accounting for Corporations
A Liability for Dividends Exists
A liability for dividends exists: A) When cumulative preference shares are sold. B) On the date of declaration. C) On the date of record. D) On the date of payment. E) For dividends in arrears on cumulative preference shares.
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A company's board of directors votes to declare a cash dividend of $.75 per share. The company has 15,000 shares authorized, 10,000 issued, and 9,500 shares outstanding. The total amount of the cash dividend is: A) $10,250. B) $14,625. C) $7,125. D) $7,500. E) $11,250.
A company declared a $0.50 per share cash dividend. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 ordinary shares. The journal entry to record the dividend declaration is: A) Debit Retained Earnings $4,000; credit Ordinary Dividend Payable $4,000. B) Debit Ordinary Dividend Payable $4,000; credit Cash $4,000. C) Debit Retained Earnings $4,500; credit Ordinary Dividend Payable $4,500. D) Debit Ordinary Dividend Payable $4,500; credit Cash $4,500. E) Debit Retained Earnings $10,000; credit Ordinary Dividend Payable $10,000.
A corporation's distribution of additional shares to its shareholders without the receipt of any payment in return is called a: A) Share dividend. B) Share subscription. C) Premium on share. D) Discount on share. E) Treasury share.
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