The Cash and Investment Pool of Lake City Allocates Dividends

question 14

Multiple Choice

The cash and investment pool of Lake City allocates dividends, interest, and capital gains and losses on a periodic basis. When the cash and investment pool accrues interest earned on investments in debt securities, pending allocation to participating funds, it would credit which of the following accounts?

• A) Interfund Loans.
• B) Revenues.
• C) Undistributed Earnings on Pooled Investments.
• D) Interfund Receivables.

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Definitions:

Board of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a corporation.

Officer

An individual holding a position of authority or command, especially within a governmental, military, or corporate structure, responsible for enforcing laws or policies.

Shareholders

Investors in a corporation, who own the corporation.

Dividends

Payments made by a corporation to its shareholders, usually derived from profits.