When a company pays dividends a) the dividends account will be decreased with a debit. b) it doesn't have to be cash, it could be another asset. c) the dividends account will be increased with a credit. d) the retained earnings account will be directly increased with a debit.
When a company pays dividends a) the dividends account will be decreased with a debit. b) it doesn't have to be cash, it could be another asset. c) the dividends account will be increased with a credit. d) the retained earnings account will be directly increased with a debit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:When a company pays dividends
a) the dividends account will be decreased with a debit.
b) it doesn't have to be cash, it could be another asset.
C) the dividends account will be increased with a credit.
d) the retained earnings account will be directly increased with a debit.
Expert Solution
Step 1
|
>Dividends are the payments made to the stockholders for the amount invested by them in form of common or preferred stocks. |
|
>Preferred dividend is usually paid out at speicified dividend rate that is pre-fixed. |
|
>Common dividend is paid at variable rate of dividend. |
|
>Dividends can be Cash Dividend, Property Dividend or Stock dividend. |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education