Budke Corporation Paid Dividends of $5,000

question 104

Multiple Choice

Budke Corporation paid dividends of $5,000. As a result of this event, the

• A) Dividends account was increased by $5,000.
• B) Dividends account was decreased by $5,000.
• C) Cash account was increased by $5,000.
• D) Cash was increased and the Dividends account was decreased by $5,000.

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Definitions:

Variable Cost Per Unit

The cost that changes in proportion to the level of output or activity, calculated on a per-unit basis.

Net Operating Income

A company's total earnings derived from its operations, excluding taxes and interest.

Advertising

The activity or profession of producing advertisements for commercial products or services.

Contribution Format

A way of presenting a profit and loss statement where costs are separated into variable and fixed, and the contribution margin is highlighted.