When recording dividends received from a stock investment accounted for using the equity method, which of thefollowing statements is true?a. Total assets are increased and net income is increased.b. Total assets are increased and total stockholders’ equityis increased.c. Total assets are decreased and total stockholders’equity is decreased.d. Total assets and total stockholders’ equity do notchange

Q: Indicate the effects of each of the following transactions on Assets, Liabilities, Share Capital and…

A: Each financial transaction in a business affects at least two accounts so that the accounting…

Q: When a company issues a stock dividend which of the following would be affected? a. Earnings per…

A: Stock dividends:Stock dividends are the number of shares issued by a company to the existing…

Q: Cumulative preferred dividends in arrears should be shown in a corporation's balance sheet as: O A…

A: The cumulative preference shareholders have the right to receive any arrears of dividend also.

Q: In a balance sheet, the total of common stock and retained earnings are denoted as Select one: a.…

A: Equity means the amount which is due to the owner of the company i.e. common stock in case of…

Q: What is the result of stock dividends? O a. Retained earnings decrease while total paid-in capital…

A: Stock dividend means when a company declares Stock (Common shares) as dividends to its various…

Q: When a company issues a stock dividend, which of the following would be affected? Group of answer…

A: It is a dividend paid to shareholders in the form of stock rather than cash. Although it might…

Q: Which of the following would cause a decrease in stockholders' equity? (A) Purchase of equipment (B)…

A: Stockholders' equity consists of common stock, paid-in capital, treasury stock and retained…

Q: When a stock dividend is declared, which of the following accounts is credited? O a. Common Sock O…

A: Stock dividend is the dividend payment made in the form of the number of stocks.

Q: When a company issues a stock dividend, which of the following would be affected? Select one: O a.…

A: SOLUTION- STOCK DIVIDEND- IT IS A DIVIDEND PAYMENT TO THE SHAREHOLDERS THAT IS MADE IN SHARES RATHER…

Q: Stockholders' equity a.is usually equal to cash on hand b.includes retained earnings and paid-in…

A: Stockholders equity are the section of shareholders that includes  paid in capital, additional paid…

Q: When liabilites increase and stock holder equity decreases, what is the total assets?  shouldn't it…

A: According to the accounting equation, the total of liabilities and the stockholder equity is the…

Q: It is calculated, taking into account the outstanding equity shares of the company A. Conversion…

A: Issue of shares is an important source of finance for the business. Several type of shares can be…

Q: The effect of the declaration of a cash dividend by the bc Increase Stockholders' equity Decrease a.…

A: Solution: The effect of declaration of cash dividend by board of director is to "Increase…

Q: It represents the cumulative balance of periodic earnings, dividend distributions, prior period…

A: Retained earnings is defined as portion of profits which remains available in the company after…

Q: Indicate whether each of the following transactions would increase, decrease or have no effect on…

A: Accounting equation:   Accounting equation is treated as a basic foundation of the double entry…

Q: (a) Reproduce the Retained Earnings account (T-account) for 2010. (b) Prepare a retained earnings…

A: Particulars Amount Amount Shareholders equity & Liabilities     shareholders’ equity…

Q: How should a "gain" from the sale of treasury stock be reflected when using the cost method of…

A: ANSWER   It will be recorded as a paid-in capital from treasury stock. Although the company made a…

Q: The Statement of Stockholders' Equity includes an adjustment for:  a Only Retained Earnings.  b…

A: The statement of stockholders' equity can be defined as the statement showing the capital components…

Q: How does the declaration of a cash dividend affect a company’s assets, liabilities, and equity?a. It…

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: Stockholders' equity consists of paid-in (or contributed) capital and retained earnings. True or…

A: The stockholder's equity is the remaining amount of assets after paying out its total liabilities.…

Q: The right side of the balance sheet shows the firm's liabilities and stockholders' equity. Which of…

A: The accounting  equation is Total assets = Total shareholders  equity  + Total liabilities

Q: When an investor uses the equity method to account for investments in common stock, cash dividend…

A: 1. Equity method - Under an Equity method of accounting following entries and changes are made every…

Q: The effect of a stock dividend is to change the composition of stockholders' equity. decrease total…

A: The stock dividend is a method of capitalizing the retained earnings. Generally, the large stock…

Q: Stockholders' equity consists of which of the following? Multiple Choice O O Paid-in (or…

A: Stockholders' equity=Paid in capital+Retained earnings

Q: Which of the following results in a decrease in the investment account when applying the equity…

A: The equity method is generally applied in case of investment in associate/ joint venture

Q: Choose the correct.When an investor uses the equity method to account for investments in common…

A: When an investor uses the equity method to account for investments in common stock, the investor’s…

Q: Do you add or subtract total retained earnings with paid in capital when accounting stock?

A: 1. Retained Earnings - Retained Earnings is the retained accumulated profit of the company over the…

Q: The effect of a stock dividend is to change the composition of stockholders' equity. decrease total…

A: Solution The journal entry for issuance of stock dividend is Retained earnings debit Common stock…

Q: (Equity Items on the Balance Sheet) The following are selected transactions that may affect…

A: Accounting equation:   Accounting equation is an accounting tool expressed in the form of equation,…

Q: Which of the following would cause a decrease in stockholders' equity? (A) Purchase of equipment (B)…

A: The shareholder's equity section is a section of the company's balance sheet. It is a section that…

Q: Indicate whether each of the following transactions increases (+), decreases (−), or has no effect…

A: Stock: It can be defined as a security that represents the ownership interest of the stockholder…

Q: Dividends in arrears on preference shares are reported in the financial statements as a (an) a.…

A: dividend are paid by the company to its shareholders.both the shareholder whether it is common stock…

Q: The declaration of a stock dividend will * O increase paid-in capital. change the total of…

A: Stock dividend will affect: Retaining earnings Common stock Liabilities

Q: Which of the following statements about stock dividendsis true?a. Stock dividends are reported on…

A: Stock dividends: It can be defined as the payment of dividends to the shareholders in the form of…

Q: True or False? The Statement of Stockholders' Equity shows how the balance of each equity account…

A: The statement of shareholder's equity is one of the financial statements of the business.

Q: The cumulative effect of the declaration and distribution of a stock dividend on a company's balance…

A: Stock Dividend is where stocks are distributed as dividend to shareholders. In stock dividend , the…

Q: Capital structure refers to Select one: a. Total assets minus Liabilities b. Shareholders' equity c.…

A: The capital structure is how a firm utilizes different sources of finance to fund its operations.

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.