Malcolm Corporation Declared a Dividend of $5 Per Share on 1,000

question 18

Multiple Choice

Malcolm Corporation declared a dividend of $5 per share on 1,000 shares.The entry to record the transaction would be to:

• A)debit Dividends Expense $5,000; credit Cash $5,000.
• B)credit Cash $5,000,debit Dividends Expense $5000.
• C)debit Dividends Payable $5,000; credit Retained Earnings $5,000.
• D)debit Retained Earnings $5,000; credit Dividends Payable $5,000.

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Definitions:

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of product.

Profit-maximizing Output

The level of production at which a company achieves the highest possible profit.

Marginal Cost

The rise in overall expenses resulting from the production of an additional unit.

Marginal Revenue

The additional income from selling one more unit of a good; it is the change in total revenue from an additional unit sold.