On June 1, a Board of Directors Declared a $3

question 124

Multiple Choice

On June 1, a board of directors declared a $3 per share cash dividend, payable on June 30 to all common stockholders of record on June 15. The company has 10,000 shares of common stock authorized, 1,000 shares issued, and 200 shares in the treasury. The entry to record the dividend declaration increases

• A)a liability account by $2,400.
• B)an asset account by $3,000.
• C)an expense account by $2,400.
• D)a stockholders' equity account by $3,000.

---

Definitions:

Total Expense

The sum of all costs and expenses associated with the operations of a business.

Level Of Activity

A measure of the amount of output or work performed, often used in accounting to allocate fixed costs or in operational planning.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core business activities.