1. Which of the following would never affect retained earnings? a. Correction of a prior period errors b. Payment of long-term indebtedness c. Stock dividend d. Reissue of treasury shares
1. Which of the following would never affect retained earnings?
a. Correction of a prior period errors
b. Payment of long-term indebtedness
c. Stock dividend
d. Reissue of treasury shares
2. Appropriation for
a. Component of equity as part of share premium
b. Component of total liabilities as current liability
c. Component of total assets as noncurrent assets
d. Component of equity as part of reserves
3. An appropriation of accumulated profits for possible contingencies should be
a. Charged with all losses related to that contingency
b. Transferred to income as losses are realized
c. Shown within shareholders’ equity in the statement of financial position
d. Classified in the liability section of the statement of financial position
4. When
a. called dividends in arrears
b. Distribution of earnings
c. never paid
d. considered a liability
5. Dividends in arrears on cumulative preference share
a. are considered to be a non-current liability
b.Only occur when preferred dividends have been declared
c. are considered to be a current liability
d.Should be disclosed in the notes to the financial statements
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