15. The journal entry to record the declaration of a cash dividend would include a:
A)credit to Cash
B)debit to Dividend Expense
C)debit to Retained Earnings
D)debit to Dividends Payable
16. A Deficit in Retained Earnings can be created by all of the following except.
A) Net losses exceeding net income
B) Paying more in dividends than earnings generated
C) Receiving less than the par value when stock is issued
D) All of the above can create a deficit
17.The entry to record the declaration and the entry to record the payment of a cash dividend would include all the following except:
A) Credit to dividend payable
B) Debit to Retained Earnings
C) Debit to dividend payable
D) Debit to dividend expense
18. The account "Stock Dividends Distributable" would be shown on a company's financial statements as:
A)contributed capital
B)an expense
C)a liability
D)revenue
19. A common stock dividend results in a decrease in:
A)assets
B)common stock
C)retained earnings
D)both assets and retained earnings
20. Which of the following is true about a stock dividend.
A) Assets decrease and owners’ equity decreases
B) Assets increase and Liabilities increase
C) Contributed Capital increases and Retained earnings decreases
D) Liabilities decrease and Contributed Capital Increases
21. PAC Corporation has 500,000 shares of $5 par value common stock authorized, and 300,000 shares issued and outstanding. The market value of the stock is $14 per share. The journal entry to record the declaration of a 15% stock dividend would include a:
A)credit to dividend payable for $1,050,000
B)credit to Common Stock for $375,000
C)debit to Retained Earnings for $630,000
D)Credit to Stock Dividends Distributable for $375,000
22. Foster Corporation has 800,000 shares of $3 par value common stock authorized, and 350,000 shares issued and outstanding. The market value of the stock is $22 per share. The journal entry to record the declaration of a 75% stock dividend would include a:
A)credit to dividend payable for $1,800,000
B)credit to Common Stock Dividends Distributable for $787,500
C)debit to Retained Earnings for $5,775,000
D)credit to Common Stock Dividends Distributable for $4,987,500
23. Olio Corporation has 900,000 shares of $1 par value common stock authorized, and 550,000 shares issued and outstanding. The market value of the stock is $18 per share. The journal entry to record the declaration of a 10% stock dividend would include a:
A)credit to dividend payable for $90,000
B)credit to Common Stock Dividends Distributable for $90,000
C)debit to Retained Earnings for $990,000
D)credit to Paid-in-Capital in Excess of Par for $55,000
24. The journal entry to record the distribution of a small common stock dividend would include a:
A)credit to Paid-in-Capital in Excess of Par--Common Stock
B)debit to Stock Dividends Distributable
C)credit to Retained Earnings
D)debit to Common Stock
