LMN Ltd Declared an Interim Dividend on 12 February 2018

question 20

Multiple Choice

LMN Ltd declared an interim dividend on 12 February 2018 of 5 cents per share (500 000 issued shares) and paid it on 3 March 2018. The journal entry on 3 March 2018 would include:

• A) DR Interim dividend declared, $25 000.
• B) CR Cash, $25 000.
• C) CR Interim dividend payable, $25 000.
• D) CR Retained profits, $25 000.

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Definitions:

Income Statement

A report that outlines a company's financial results for a certain period, including income and expenditures, to reveal a net gain or deficit.

Balance Sheet

A report detailing a corporation's assets, liabilities, and the equity of its shareholders at a particular moment.

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, serving as the primary source for preparing financial statements.

Income Statement Accounts

These include revenue, expense, gain, and loss accounts that summarize the financial performance of a company over a period of time.