Deck22

Question 1

What is the main source that Dividends are paid out of?

Answer 1

Retained Earnings

Question 2

Owners Equity(OE) is reduced for all Dividends except:

Answer 2

Stock dividends

Question 3

For Property Dividends (Noncash), the assets are measured at what at the date of declaration?

Answer 3

Fair Value

Question 4

What is a Scrip Dividend?

Answer 4

When a company declared a Dividend, but doesn’t have the cash to pay for it.(They promise to pay the Dividend Later - in effect creating a Note Payable)

Question 5

What type of Dividend is not payed from Retained Earnings?

Answer 5

Liquidating Dividend - they are paid from Contributed Capital

Question 6

When Dividends are declared, RE is Debited (subtracted) at the date of (a) Declaration or (b)Payment

Answer 6

(a) Declaration

Question 7

Dividends in Arrears are disclosed where?

Answer 7

Footnote only

Question 8

If Paid in Capital goes below zero, then any amount remaining is:

Answer 8

Debited to Retained Earnings(RE)

Question 9

Are stock dividends received treated as revenue?

Answer 9

No

Question 10

Do stock dividends increase Current Liabilities when declared?

Answer 10

No - They do not decrease assets or increase debt

Question 11

Large stock Dividends (>25%) are recorded at (a) market value or (b) par value

Answer 11

(b) Par Value

Question 12

Do stocks or warrants have any effects on earnings?

Answer 12

No - a firm does not profit from transactions with owners.

Question 13

When a company goes through quasi-reorganization, its balance sheet carrying amounts are state at:

Answer 13

Fair Value