Where a Dividend Is Declared in a Prior Period and Paid

question 35

True/False

Where a dividend is declared in a prior period and paid in a current period, the credit in the consolidation elimination entry is made against the dividend declared/paid account.

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Definitions:

Merchandise

Merchandise refers to goods or products that are purchased, stored, and sold by businesses to generate revenue.

Net Purchases

The total amount of purchases made by a company after subtracting returns, allowances, and discounts.

Merchandise Available

The total goods available for sale during a certain period, including both beginning inventory and purchases made.

Periodic Inventory

A periodic inventory system updates inventory balances and costs of goods sold at the end of an accounting period, rather than after each sale or purchase.