If a Corporation Declares a $100,000 Cash Dividend, the Account

question 98

Multiple Choice

If a corporation declares a $100,000 cash dividend, the account to be debited on the date of declaration is:

• A) Common Stock.
• B) Dividends Payable.
• C) Retained Earnings.
• D) Paid-in Capital in Excess of Par.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing ownership equity in the company.

Cash Dividend

A financial disbursement by a corporation to its stockholders, often as part of the company's profit sharing.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, increasing the number of outstanding shares.

Common Stock

Equity ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.