If the Dividends Account Is Not Recorded as a Reduction

question 97

True/False

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration, the dividends account is closed to Retained Earnings at the end of the accounting period.

---

Definitions:

Minor Expenditures

Small or insignificant costs that are usually of a non-recurring nature and may not be capitalized.

Discounted Note

A debt instrument sold for less than its face value that will pay the face value at maturity, effectively providing interest to the holder.

Notes Receivable

Financial assets representing amounts owed to a company, promised to be paid back with interest.

Accounts Receivable Assigned

A financing arrangement where a company uses its receivables as collateral to secure a loan.