Which of the Following Correctly Describes the Recording of a Dividend

question 1

Multiple Choice

Which of the following correctly describes the recording of a dividend declaration by a company's board of directors?

• A)A debit to retained earnings and a credit to cash.
• B)A debit to additional paid-in capital and a credit to dividends payable.
• C)A debit to cash and a credit to retained earnings.
• D)A debit to retained earnings and a credit to dividends payable.

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Definitions:

Discounts

Reductions to the selling price of goods or services, often used as a sales strategy to encourage purchases.

Purchased Merchandise

The act of buying goods for sale, often regarded as inventory in the books of a retailer or distributor.

Receiving Report

A document used in businesses to record the receipt of goods from a supplier, detailing quantities and condition of the items.

Merchandise Inventory

Products a business maintains with the intent to sell to consumers as part of its regular operations.