Question

On Mar 3, Lyons Company paid dividends of $1,000. Use your knowledge of what a correct journal entry should look like to identify what would be included. (Check all that apply.) Dividends would be debited and listed first. • Dividends would be credited and listed second, Cash would be debited and listed first. Cash would be credited and listed second. Dividends expense would be debited and listed first.

Answer 1

AaBb Dd AaBbCcDd AaBbcc AaBbcc Aab AaBb Cel AaBbceDdAaBbcDdAabbcode Aal 11 Normal 11 No Spacing Heading 1 Heading 2 Title Subtitle Subtle Emp... Emphasis Intense Paragraph Answer Dividends should be debited and the cash should be credited by the same amount. Entry: Retained earnings A/c Dr 1000 To Dividend payable A/c 1000 (On due) 1000 Dividend payable A/c Dr To Cash Ale (On payment) 1000 Explanation: Dividends are the amount that are paid to the shareholders of a business organization by the owner of the organization. Dividends are the part of the profit only and are obviously paid when the company earns a profit in a particular year. The dividends on the account of the company should be debited and therefore will appear on the left side of the table. To equalize and nullify the effect of it in case of the double entry system of accounting, cash shall be credited and therefore should appear on the right side of the table by the same amount as that of dividend. Note : Dividends distributed to shareholders are not recorded as an expense on company's income statement. Rather, they represent a part of a company's profit or accumulated cash which is being returned to a company's shareholders as a reward for their investiment. United States)