On July 1, a board of directors declared a $3 per share cash dividend, payable on July 31 to all common stockholders of record on Juy 15. The company has 10,000 shares of common stock authorized, 1,000 shares issued and 200 shares in the treasury.  The entry to record the dividend declaration increases a an expense account by $3,000. b a stockholders' equity account by $3,000. c a liability account by $2,400. d an asset account by $2,400.

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A:

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A: a.

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.