Advanced Accounting Ch 11

A corporation has no obligation to distribute retained earnings to stockholders until the board of directors has declared a dividend.

• True

• False

The total amount of dividends to be paid are allocated first to common stock then to preferred.

• True

• False

No entry is recorded on the date of record

• True

• False

A buyback often occurs when a corporation believes that its stock is overvalued by the stock market

• True

• False

Marketable securities are an asset of a corporation

• True

• False

Dividends revenue is classified as other revenue on the income statement

• True

• False

Declared an annual cash dividend on common and preferred stock

• Debit Dividends, credit dividends payable

• debit dividends payable, credit dividends

• debit dividends, credit cash

• credit dividends, debit cash

Paid cash for annual cash dividend previously declared

• Debit dividends, credit cash

• Debit dividends payable, credit cash

• Credit dividends payable, debit cash

• credit dividends, debit cash

Paid cash for 100 share of the corporations own common stock

• debit treasury stock, credit cash

• debit cash, credit treasury stock

• debit stock payable, credit treasury stock

• debit treasury stock, credit stock payable

Received cash dividend from an investment in the stock of another corporation

• Debit dividends revenue, credit cash

• Debit dividends, credit cash

• debit cash, credit dividends

• debit cash, credit dividends revenue