Dividends Require Two Accounting Entries, One When the Dividend Is

question 17

Multiple Choice

Dividends require two accounting entries, one when the dividend is declared and another when it is paid. What is the correct entry to record the declaration of a cash dividend of 20c a share calculated on 100 000 shares?

• A) Debit dividend payable $20 000; credit cash at bank $20 000
• B) Debit retained profits $20 000; credit dividend payable $20 000
• C) Debit bank $20 000; credit share capital $20 000
• D) Debit dividend payable $20 000; credit retained profits $20 000

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Definitions:

Aggregate Demand

The comprehensive requirement for all goods and services in an economic situation, fixed at a specific overall price level during a certain timeframe.

Stagflation

An economic condition characterized by high inflation, high unemployment, and stagnant demand in a country’s economy.

Aggregate Demand

The collective demand for all goods and services within a particular economy at a specific price level and time period.

Aggregate Demand

is the total demand for all goods and services within a particular market or economy at a given price level and in a given time period.