Collection of an Accounts Receivable Will

question 51

Multiple Choice

Collection of an accounts receivable will:

• A)increase the cash account and decrease the accounts receivable account.
• B)increase both the cash account and the accounts receivable account.
• C)decrease both the cash account and the accounts receivable account.
• D)decrease the cash account and increase the accounts receivable account.

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Definitions:

Dividends in Arrears

Dividends on preferred stock that have been declared but not yet paid to shareholders.

Nonparticipating

Typically refers to insurance policies or preferred stock where the holders do not have the right to share in certain dividends beyond the specified rate or in the surplus assets.

Dividends

Payments made by a corporation to its shareholder members. It is the share of profits and retained earnings that the company pays out to its shareholders.

Paid-In Capital

Funds raised by a company from investors through the issuance of stock, excluding any amounts derived from retained earnings.