Question

1.Indicate the proper journal entry to record payment of a cash dividend previously declared:

Select one:

a. Debit Cash, credit Dividend Payable

b. Debit Dividends, credit Cash

2.A bookkeeper erroneously recorded a $7 accrual of wages payable using this journal entry:

Sales Discount		$7
	Inventory		$7

Indicate the effect of the error on Expenses, Assets, and Liabilities, respectively:

Select one:

a. No Error, Understated, No Error

b. Overstated, No Error, Understated

c. Understated, Understated, Understated

d. No Error, No Error, Understated

e. Understated, No Error, Understated

c. Debit Dividends, credit Dividend Payable

d. Debit Dividend Payable, credit Cash

e. Debit Cash, credit Dividends

3.

The Vlasik Company paid a cash dividend previously declared and recorded this journal entry.



Determine the effect of the error on Net Income, Liabilities and Owners' Equity, respectively:

XX Expense Unearned Revenue xx

Select one:

a. Overstated, Overstated, Overstated

b. Understated, No Error, No Error

c. Understated, Overstated, Understated

d. Overstated, Overstated, No Error

e. Overstated, No Error, No Error

4.

The Pieper Corp. recorded the accrual of an expense by debiting Unearned Revenue and crediting Accounts Receivable.

Indicate the effect of the error on Assets, Liabilities, and Net Income, respectively:

Select one:

a. Understated, Understated, Overstated

b. Overstated, Understated, Overstated

c. Understated, No Error, Overstated

d. No Error, No Error, No Error

e. Understated, No Error, Understated

Answer 1

Solution 1:

Proper journal entry to record payment of a cash dividend previously declared is "Debit Dividend Payable, credit Cash"

Hence option d is correct.

Solution 2:

Effect of the error on Expenses, Assets, and Liabilities, respectively are "Understated, Understated, Understated"

Hence option c is correct.

Solution 3:

effect of the error on Net Income, Liabilities and Owners' Equity, respectively are "Understated, Overstated, Understated"

Hence option c is correct.

Solution 4:

effect of the error on Assets, Liabilities, and Net Income respectively are "Understated, Understated, Overstated"

Hence option a is correct.