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Page 14 15. The journal entry to record the declaration of a cash dividend would include a: A) credit to Cash. B) debit to
Page 14 15. The journal entry to record the declaration of a cash dividend would include a: A) credit to Cash. B) debit to Dividend Expense. C) debit to Retained Earnings. D) debit to Dividends Payable. 16. All the following are true statements about the declaration and distribution of stock dividends except which one? A) Stock dividends reduce the assets of the firm. B) Stock dividends do not increase or decrease liabilities. C) Stock dividends increase contributed capital. D) Stock dividends decrease retained earnings. 17. Treasury stock is shown in a company's financial statements as a(n): A) intangible asset. B) contra equity. C) current asset. D) contra asset. 18. A 100 percent stock dividend and a 2-for-1 stock split are similar in that: A) the par value of the company's stock will be cut in half. B) the number of shares of stock outstanding will double. C) total stockholders' equity will remain unchanged. D) both b and c are correct 20. The two major elements of stockholders' equity are: A) retained earnings and distributable earnings. B) contributed capital and donated capital. C) paid-in capital and contributed capital. D) paid-in capital and retained earnings. 21. The premium on Notes Payable account is a(n): A) adjunct liability account. B) contra liability account. C) contributed liability account. D) equity account. 22. Each payment on a periodic payment (installment) note payable includes: A) interest only. B) principal only. C) interest and discount. D) interest and principal. be of the
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