Which of the following statements related to dividends is incorrect? O Dividends must be paid in the period declared. O Before declaring a dividend, management must consider availability of funds to pay the dividend. O Distributions to owners must be in compliance with the state laws. O Dividends must be declared by the Board of Directors.

Which of the following statements related to dividends is incorrect? O Dividends must be paid in the period declared. O Before declaring a dividend, management must consider availability of funds to pay the dividend. O Distributions to owners must be in compliance with the state laws. O Dividends must be declared by the Board of Directors.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 13MC: The date the board of directors votes to declare and pay a cash dividend is called the: A. date of...

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Choose the correct.When an investor uses the equity method to account for investments in common stock, the investor’s share of cash dividends from the investee should be recorded as: a. A deduction from the investor’s share of the investee’s profits.b. Dividend income.c. A deduction from the stockholders’ equity account, Dividends to Stockholders.d. A deduction from the investment account(AICPA adapted)
Which of the following is most likely true regarding payment of dividends? a. Dividends may be paid from legal capital b. Retained earnings are available for dividends unless restricted by contract or by statute c. Unrealized capital is available for any type of dividend d. Capital from donated assets is available for dividends
When an investor uses the equity method to account for investments in common stock, the investor’s share of cash dividends from the investee should be recorded as A deduction from the investor’s share of the investee’s profits. Dividend income. A deduction from the stockholders’ equity account, Dividends to Stockholders. A deduction from the investment account. (AICPA adapted)
Cash dividends declared out of current earnings were distributed to an investor. How will the investors investment account be affected by those dividends under each of the following accounting methods?
Dividends are recognized in profit or loss only when: The amount of the dividend can be measured reliably. All of these. The entity's right to receive payment of the dividend is established. It is probable that the economic benefits associated with the dividend will flow to the entity.
Dividends are recognized in profit or loss only when: Group of answer choices A. The amount of the dividend can be measured reliably. B. All of these. C. It is probable that the economic benefits associated with the dividend will flow to the entity. D. The entity’s right to receive payment of the dividend is established.
The date of record is the date: Group of answer choices A)On which the board of directors of a corporation decides that a dividend will be paid. b)Used to determine exactly who will receive dividends. C)When cash is actually paid to the shareholders. D)When profits are declared. E)None of the above
The dividend is not a legal liability until the board of directors has declared it. true or false. Explain why?
Which of the following statements is TRUE regarding the equity method? A. The equity method is used for reporting gains or losses for non-strategic investments. B. The investor's share of the associate's dividends declared is reported as revenue. C. The investor's investment in the associate changes in direct relation to the changes taking place in the associate's equity accounts. D. The equity method reports unrealized gains and losses on revaluations to fair value in net income.
Dividends are recognized in profit or loss only when a. the entity's right to receive payment of the dividend is established b. it is probable that the economic benefits associated with the dividend will flow to the entity c. the amount of the dividend can be measured reliably d. all of the above.
which of the following is a control right? shareholders right to elect the members of the board of directors and to receive the remaining liquidated value of assets shareholders rights to receive the remaining liquidated value of assets shareholders right to elect the members of the board of directors bondholders right to receive interest payments
Which one of the following alternatives is correct in regarding to recording the transaction for receiving share applications and money from the public? a. The bank account must be debited with the amount received and a temporary "application and allotment account" is credited b. The bank account must be debited with the amount received and a temporary "application and allotment account" is credited with the value of the shares issued c. The bank account must be debited with the amount received and a temporary "application and allotment account" is credited to the extent of the shares offered to the public d. The bank account must be credited with the amount received and a temporary "application and allotment account" is debited