The Journal Entry to Record the Declaration of a Stock

question 93

Multiple Choice

The journal entry to record the declaration of a stock dividend includes

• A)a credit to Stock Dividends Distributable.
• B)a credit to Stock Dividends Payable.
• C)a credit to Dividends Declared.
• D)a credit to Cash.

---

Definitions:

Business Trust

A form of business organization, created by a written trust agreement, that resembles a corporation. Legal ownership and management of the trust’s property stay with the trustees, and the profits are distributed to the beneficiaries, who have limited liability.

Personally Liable

When an individual is personally responsible for fulfilling a debt or legal obligation, risking personal assets beyond a corporate structure.

Partnership

A bona fide business arrangement that includes two or more individuals managing together and sharing earnings.

Joint Venture

A joint undertaking by two or more persons or business entities to combine their efforts or their property for a single transaction or project, or for a related series of transactions or projects. A joint venture is generally treated like a partnership for tax and other legal purposes.