A Company's Board of Directors Votes to Declare a Cash

question 36

Multiple Choice

A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. The journal entry to record the payment of the cash dividend is:

• A) Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000.
• B) Debit Dividend Expense $12,000; credit Cash $12,000.
• C) Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000.
• D) Debit Common Dividend Payable $12,000; credit Cash $12,000.
• E) Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000.

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Definitions:

Online Databases

Digital collections that can be accessed through the internet, containing various types of information including articles, data sets, and multimedia.

Federal Trade Commission

A United States federal agency designed to prevent anticompetitive, deceptive, and unfair business practices.

Human Resources

The department within an organization that focuses on recruiting, managing, and directing people who work in it. They handle issues related to employment, such as compliance with labor laws and employment standards, administration of employee benefits, and some aspects of recruitment and dismissal.