Question

1. Which of the following is not a part of the dividends process?
   1. Dividends are declared by board of directors
   2. Dividends are recorded as a liability to the stockholders
   3. Dividends are determined based on total stockholder’s equity
   4. Dividends are distributed based on shares of stock
2. Stock splits will not:
   1. Affect total stockholder’s equity
   2. Increase the number of outstanding shares
   3. Reduce the par value of stock
   4. Increase the number of shares of stock on which dividends will be paid
3. How are stock splits recorded?
   1. Retained earnings is decreased, and common stock is increased based on par value
   2. Retained earnings is decreased, and common stock is increased based on market value
   3. No entry is required for a stock split
   4. Common stock receives an adjusting entry based on number of additional shares
4. Which of the following statements accurately describes the affect of treasury stock on total stockholder’s equity?
   1. Treasury stock does not affect equity because treasury stock carries no claim to equity
   2. Treasury stock decreases total stockholder’s equity
   3. Is included with common stockholder shares in determining ownership in corporate capital
   4. Is not included in common stock shares issued, so does not affect equity
5. Where are dividends reported?
   1. On the income statement
   2. On the balance sheet
   3. On the statement of retained earnings
   4. On the statement of retained earnings and on the balance sheet

Acct 202/Chap13/Flashcards/

Answer 1

Which of the following is not a part of the dividends process?

c. Dividends are determined based on total stockholder’s equity

Stock splits will not:

a. Affect total stockholder’s equity

How are stock splits recorded?

a. Retained earnings is decreased, and common stock is increased based on par value

Which of the following statements accurately describes the affect of treasury stock on total stockholder’s equity?

b. Treasury stock decreases total stockholder’s equity.

Where are dividends reported?

d. On the statement of retained earnings and on the balance sheet.

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