The following statements are true regarding dividends. Which of the following is incorrect? a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings. b) If an entity has a deficit, paying dividends is still considered legal. c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings. d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.
The following statements are true regarding dividends. Which of the following is incorrect? a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings. b) If an entity has a deficit, paying dividends is still considered legal. c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings. d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 14MC: Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a...
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The following statements are true regarding dividends. Which of the following is incorrect?
a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings.
b) If an entity has a deficit, paying dividends is still considered legal.
c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings.
d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.
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