On 1 November 2016,Oster Company Declared a Dividend of $3

question 46

Multiple Choice

On 1 November 2016,Oster Company declared a dividend of $3.00 per share.Oster Company has 20 000 ordinary shares outstanding and no preference shares.The date of record is 15 November,and the payment date is 30 November 2016.Which of the following statements is TRUE about the date of record?

• A)The company transfers cash to a stockbroking firm on the date of record.
• B)Cash is disbursed to shareholders on the date of record.
• C)The liability must be recorded on the date of record.
• D)No journal entry is made on the date of record.

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Definitions:

Convertible Preferred Stock

A type of preferred stock that offers the holder the option to convert their shares into a predetermined number of common stock shares, usually after a specific date.

Treasury Stock

Shares that were issued and then reacquired by the issuing company, reducing the amount of outstanding stock.

Earnings Per Share

A financial metric used to measure a company's profitability, calculated as net income divided by the number of outstanding shares of its common stock.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits.