When a company declares a cash dividend, thefollowing accounts are affected:a) Assets and Revenueb) Liabilities and Revenuec) Liabilities and Equityd) Equity and Revenue

Explanation of Cash Dividend:A cash dividend is a payment made by a company to its shareholders as a…

Answered: When a company declares a cash…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 2QTD

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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?
On which financial statement would the Dividends account appear? A. Balance Sheet B. Income Statement C. Retained Earnings Statement D. Statement of Cash Flows
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
Which statement is most directly affected by a change to net income? A. balance sheet B. income statement C. statement of retained earnings D. statement of cash flows
Comprehensive income: includes transactions that affect stockholders equity with the exception of those transactions that involve owners. is considered an appropriation of retained earnings. includes all transactions that are under managements control. is the result of all events and transactions reported on the income statement.
Which financial statement shows the financial performance of the company on a cash basis? A. balance sheet B. statement of owners equity C. statement of cash flows D. income statement
Retained earnings is accurately described by all except which of the following statements? A. Retained earnings is the primary component of a companys earned capital. B. Dividends declared are added to retained earnings. C. Net income is added to retained earnings. D. Net losses are accumulated in the retained earnings account.
If a company reports a gain/(loss) from the sale of assets, as part of the net income on the income statement, and the net book value of those assets on the date of the sale is known, can the amount of the cash proceeds from the sale be determined? If so, how?
Owners equity represents which of the following? A. the amount of funding the company has from issuing bonds B. the sum of the retained earnings and accounts receivable account balances C. the total of retained earnings plus paid-in capital D. the business owners/owners share of the company, also known as net worth or net assets
Revenues and expenses must be recorded in the accounting period in which they were earned or incurred, no matter when cash receipts or outlays occur under which of the following accounting methods? A. accrual basis accounting B. cash basis accounting C. tax basis accounting D. revenue basis accounting
Describe the relationship between changes in cash and changes in noncash assets, liabilities, and stockholders equity.
On which two financial statements would the Retained Earnings account appear? A. Balance Sheet B. Income Statement C. Retained Earnings Statement D. Statement of Cash Flows

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When a company declares a cash dividend, the following accounts are affected: a) Assets and Revenue b) Liabilities and Revenue c) Liabilities and Equity d) Equity and Revenue