111. The date on which a cash dividend becomes a binding legal obligation is on the
A. declaration date.
B. date of record.
C. payment date.
D. last day of the fiscal year end.
112. The cumulative effect of the declaration and payment of a cash dividend on a company’s financial statements is to
A. decrease total liabilities and stockholders’ equity.
B. increase total expenses and total liabilities.
C. increase total assets and stockholders’ equity.
D. decrease total assets and stockholders’ equity.
113. Which of the following is the appropriate general journal entry to record the declaration of a cash dividends?
A. Retained earnings
Cash
B. Cash Dividends payable
Cash
C. Paid-in capital
Cash Dividends payable
D. Cash Dividends
Cash Dividends Payable
114. Miriah Inc. has 6,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2006. What is the annual dividend on the preferred stock?
A. $50 per share
B. $30,000 in total
C. $300 in total
D. $0.50 per share
115. Which of the following is not a prerequisite to paying a cash dividend?
A. formal action by the board of directors
B. market value in excess of par value per share
C. sufficient cash
D. sufficient retained earnings
116. The net effect to a corporation of the declaration and payment of a cash dividend is to
A. decrease assets and decrease stockholders' equity
B. decrease liabilities and decrease stockholders' equity
C. increase stockholders' equity and decrease liabilities
D. increase assets and increase stockholders' equity
117. The liability for a dividend is recorded on which of the following dates?
A. the date of record
B. the date of payment
C. the date of announcement
D. the date of declaration
118. When a stock dividend is declared, which of the following accounts is credited?
A. Common Sock
B. Dividend Payable
C. Stock Dividends Distributable
D. Retained Earnings
119. Cash dividends are usually not paid on which of the following?
A. class B common stock
B. preferred stock
C. treasury stock
D. class A common stock
120. Treasury stock shares are
A. shares held by the U.S. Treasury Department
B. part of the total outstanding shares but not part of the total issued shares of a corporation
C. unissued shares that are held by the treasurer of the corporation
D. issued shares that are held by the treasurer of the corporation