Self Assessment Quizzes

CHAPTER 21: Section 2 Distribution of Corporate Earnings

	1.	If a corporation issued 10,000 shares of $10 par value common stock at $10 per share the accounts affected would be

		a.	Cash in Bank and Common Stock
		b.	Common Stock and Income Summary
		c.	Common Stock and Retained Earnings
		d.	Cash in Bank and Retained Earnings

	2.	If a corporation declared a $2 per share cash dividend, the accounts affected would be

		a.	Cash in Bank and Dividends
		b.	Common Stock and Dividends
		c.	Cash in Bank and Dividends Payable
		d.	Dividends and Dividends Payable

	3.	The amount of a dividend on preferred stock is

		a.	always the same as the dividend on common stock
		b.	double the dividend to common stockholders
		c.	predetermined
		d.	voted on by the preferred stockholders

	4.	A dividend is

		a.	a payment of stockholder debt
		b.	a distribution of cash to stockholders
		c.	paid by all corporations to their stockholders
		d.	an increase in cash to a corporation

	5.	When dividends are declared, they are recorded in a separate account called

		a.	Dividends
		b.	Dividends r Us
		c.	Dividends Declared
		d.	Dividends Receivable

	6.	The three dates important in the dividend process are

		a.	date of entry, date of declaration, and date of payment
		b.	there are no important dates
		c.	date of record, date of entry, and date of declaration
		d.	date of declaration, date of record, and date of payment

	7.	Dividends

		a.	increase retained earnings
		b.	reduce retained earnings
		c.	have no affect on retained earnings
		d.	are paid preferred stockholders who vote prior to common stockholders