Dividends are recognized in profit or loss only when: a. It is probable that the economic benefits associated with the dividend will flow to the entity. b. The amount of the dividend can be measured reliably. c. All of these. d. The entity’s right to receive payment of the dividend is established.

Dividends are recognized in profit or loss only when: a. It is probable that the economic benefits associated with the dividend will flow to the entity. b. The amount of the dividend can be measured reliably. c. All of these. d. The entity’s right to receive payment of the dividend is established.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 21MC: Which of the following measures the portion of a corporations profit allocated to each outstanding...

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Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
Which of the following measures the portion of a corporations profit allocated to each outstanding share of common stock? A. retained earnings B. EPS C. EBITDA D. NOPAT
Dividends are recognized in profit or loss only when a. the entity's right to receive payment of the dividend is established b. it is probable that the economic benefits associated with the dividend will flow to the entity c. the amount of the dividend can be measured reliably d. all of the above.
Dividends are recognized in profit or loss only when: The amount of the dividend can be measured reliably. All of these. The entity's right to receive payment of the dividend is established. It is probable that the economic benefits associated with the dividend will flow to the entity.
Dividends are recognized in profit or loss only when: Group of answer choices: The entity’s right to receive payment of the dividend is established. It is probable that the economic benefits associated with the dividend will flow to the entity. The amount of the dividend can be measured reliably. All of these.
Dividends are recognized in profit or loss only when: Group of answer choices A. The amount of the dividend can be measured reliably. B. All of these. C. It is probable that the economic benefits associated with the dividend will flow to the entity. D. The entity’s right to receive payment of the dividend is established.
Which of the following is most likely true regarding payment of dividends? a. Dividends may be paid from legal capital b. Retained earnings are available for dividends unless restricted by contract or by statute c. Unrealized capital is available for any type of dividend d. Capital from donated assets is available for dividends
The following statements are true regarding dividends. Which of the following is incorrect? a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings. b) If an entity has a deficit, paying dividends is still considered legal. c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings. d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.
If a company uses the equity method to account for an investment in another company, which of the following is true? Income is combined proportionate to ownership. Income to the investing company consists of actual dividends, interest, or capital gains. All of the investee’s income is included in the investor’s income except for income relating to intra-entity transactions. Income of the investee is included in the investor’s income but reduced by any dividends paid to the investor.
Which of the following tests restricts the amount of dividends that a corporation may declare? a. Cash flow test b. Book value test c. Solvency test d. Income to expense ratio test
Determine the total amount of dividends that must be declared to meet the dividend goal of the entity.
4) XYZ Corporation declares and distributes a cash dividend that is a result of current earnings. Under both the fair value and equity method, the receipt of these dividends will be recorded as dividend revenue by the investor. (True/False)