Failure to Record Dividends Paid Would Result in Which of the Following

question 27

Multiple Choice

Failure to record dividends paid would result in which of the following?

• A)Net income being understated
• B)An increase in total liabilities
• C)Stockholders' equity being overstated
• D)Total assets being understated

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Definitions:

Journalize

The act of documenting monetary transactions within a journal during a stage in the accounting cycle.

Dividends

Payments made by a corporation to its shareholders, often as a distribution of profits.

Journal Entry

A record in accounting that notes the debit and credit transactions affecting a company's financial statements.

Stockholders

Individuals or entities that own shares in a corporation, giving them certain rights and responsibilities.