The Declaration of a Stock Dividend Was Credited to Dividends

question 29

Multiple Choice

The declaration of a stock dividend was credited to Dividends Payable and debited to Retained Earnings.This error would cause:

• A)the period end assets to be overstated.
• B)the period end liabilities to be overstated.
• C)the period end stockholders' equity to be overstated.
• D)the period's net income to be overstated.

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Definitions:

Debit Memo

A document or entry that records an adjustment or increases in an account, typically indicating a debtor owes more money to the creditor.

Bank Service Charges

Fees charged by banks for various account and transaction services provided to customers.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those shown on a bank statement to ensure accuracy and consistency.

Journal Entries

The record of all financial transactions in the double-entry bookkeeping system of a company, each entry consisting of a debit and credit.