If a Company Is Using the Accrual Method of Accounting,when

question 23

Multiple Choice

If a company is using the accrual method of accounting,when is revenue recorded?

• A) When cash is received, even though services may be rendered at a later date
• B) When services are rendered, even though cash may be received at a later date
• C) When cash is received, before the completion of the services
• D) When cash is received, 30 days after the completion of the services

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Definitions:

Common Stock Dividends Distributable

An amount declared by a company’s board of directors to be distributed to common stockholders, recorded as a liability until paid.

Paid-in Capital

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares.

Stock Dividends

A distribution of a company's earnings to shareholders in the form of additional shares, rather than cash.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the company does not change.