age 2 8. A corporate board of directors does not generally a. select officers. b. formulate operating policies c, declare dividends. d. execute policy 9. The date on which a cash dividend becomes a binding legal obligation is on the a. dclaration date. b. date of record. c. paynent dte d. last day of the fiscai year-end 10. Which of the following statements about retained earnings restrictions is incorrect? a. Many states require a corpozation to restrict retained earpings b. Long-term debt contracts may impose a restriction on retained c. The board of directors of a corporation may voluntarily create d. Retained earnings restrictions are generally disclosed through a for the cost of treasury stock purchased. earnings as a condition for the loan. retained earnings restrictions for specific purposes. journal entry on the books of a company 11. Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity a. Inerease b. No change C. Decrease d. Decrease Decrease Increase Increase No change No change Decrease Decrease Increase 12. A small stock dividend is defined as a. less than 30% but greater than 25% of the corporation's issued stock b. between 50% and 1009 of the corporation's issued stock. c: more than 308 of the corporation's issued stock. d. less than 20-25% of the corporation's issued stock. 13. A stockholder who receives a stock dividend would a. expect the market price per share to increase. b. own more shares of stock. c. expect retained earnings to increase. d. expect the par value of the stock to change. 14. If a stockholder receives a dividend consisting of a promissory note, the stockholder has received a a. stock dividend. b. cash dividend. c. contingent dividend. d. scrip dividend