On April 30, 2012, Loufti Company Declared a Dividend of $40,000

question 12

Multiple Choice

On April 30, 2012, Loufti Company declared a dividend of $40,000. Loufti Company decided that the dividend would be paid on June 15, 2012, to all shareholders of record on May 25, 2012. The journal entry to record the declaration of the dividend on April 30 would include a

• A) Credit to Dividends of $40,000
• B) Debit to Dividends Payable of $40,000
• C) Debit to Cash of $40,000
• D) Credit to Dividends Payable of $40,000

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Definitions:

Audit

A systematic examination or inspection of financial records, documents, or an entity's performance to ascertain accuracy and compliance.

Contract Law

A branch of legal studies that deals with agreements between parties, their rights, and obligations.

Five-Year Renewal

Typically refers to the option or requirement to renew a contract, license, or agreement for an additional five-year period.

Mechanical Engineer

A professional who applies principles of physics and materials science for the design, analysis, manufacturing, and maintenance of mechanical systems.