Which of the Following Is NOT True of Share Dividends

question 1

Multiple Choice

Which of the following is NOT true of share dividends?

• A)Share dividends affect only shareholders' equity accounts.
• B)Share dividends have no effect on total shareholders' equity.
• C)Share dividends increase dividends payable and reduce cash.
• D)Share dividends have no effect on assets or liabilities.

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Definitions:

Uncollectible Accounts

Uncollectible accounts are receivables that a company deems uncollectable and likely will not be recovered, often written off as a bad debt expense.

Percent of Sales Method

A financial forecasting approach in which accounts are projected to increase as a percentage of the projected sales level.

Unadjusted Trial Balance

A list of all the accounts and their balances in a company's ledger before any adjusting entries are made for accounting purposes.

Credit Sales

Sales processes in which products or services are provided to a customer, with the expectation that payment will be made in the future.