Multiple Choice Question 133

The board of directors of Ayayai Corp. declared a cash dividend of $2 per share on 34000 shares of common stock on July 15, 2017. The dividend is to be paid on August 15, 2017, to stockholders of record on July 31, 2017. The effects of the journal entry to record the payment of the dividend on August 15, 2017, are to

increase stockholders equity and increase liabilities.

decrease liabilities and decrease assets.

decrease stockholders equity and decrease liabilities.

increase stockholders equity and decrease assets.

Multiple Choice Question 129

The board of directors of Ayayai Corp. declared a cash dividend of $2 per share on 40000 shares of common stock on July 15, 2017. The dividend is to be paid on August 15, 2017, to stockholders of record on July 31, 2017. The correct entry to be recorded on July 15, 2017, will include a

credit to Cash Dividends.

debit to Dividends Payable.

credit to Cash.

debit to Cash Dividends.

Multiple Choice Question 143

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

The corporation is committed to a legal, binding obligation.

The dividend can be rescinded once it has been declared.

A liability account must be increased.

The board of directors formally authorizes the cash dividend.

Multiple Choice Question 140

Regular dividends are declared out of

paid-in capital in excess of par value.

common stock.

treasury stock.

retained earnings.