Acc 206 Week 11 Final Exam – Strayer

ACC 206 Week 11 Final Exam – Strayer

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Chapter 14 Through 19

CORPORATIONS:DIVIDENDS, RETAINED EARNINGS, AND INCOME REPORTING

CHAPTERSTUDY OBJECTIVES

1. Prepare the entries for cash dividends and stock dividends.

2. Identify the items reported in a retained earnings statement.

3. Prepare and analyze a comprehensive stockholders' equity section.

4. Describe the form and content of corporation income statements.

5. Compute earnings per share.

TRUE-FALSESTATEMENTS

1. Dividends may be declared and paid in cash or stock.

2. Cash dividends are not a liability of the corporation until they are declared by the board of directors.

3. The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

4. A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

5. A 3 for 1 common stock split will increase total stockholders' equity but reduce the par or stated value per share of common stock.

6. Retained earnings represents the amount of cash available for dividends.

7. Net income of a corporation should be closed to retained earnings and net losses should be closed to paid-in capital accounts.

8. A debit balance in the Retained Earnings account is identified as a deficit.

9. A correction in income of a prior period involves either a debit or credit to the Retained Earningsaccount.

10. Prior period adjustments to income are reported in the current year's income statement.

11. Retained earnings that are restricted are unavailable for dividends.

12. Restricted retained earnings are available for preferred stock dividends but unavailable for common stock dividends.

13. A retained earnings...