GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 11, Problem 8MCQ
Which statement regarding dividends is false?
- a. Dividends represent a distribution of corporate profits to owners.
- b. Both stock and cash dividends reduce
retained earnings . - c. Cash dividends paid to stockholders reduce net income.
- d. None of the above statements are false.
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Students have asked these similar questions
5.
Which one of the following statements is NOT true relating to dividends?
1. Dividends are a portion of the profit of a company divided amongst the shareholders.
2. Dividends need not be declared solely from the profit of the current year and can
include profits from previous trading periods, included in retained income.
3. Dividends can only be declared if approved by the shareholders through their voting
rights.
4. Dividends need only be paid out in cash and cannot be in the form of capitalization
shares.
Dividends are sometimes said to have been paid “out of retained earnings.” What is the error, if any, in that statement?
Which of the following is the reason that preferred dividends declared during the period are deducted from net income in calculating return on common stockholders’ equity?
a.
Preferred dividends are not paid from net income.
b.
Preferred dividends are not a part of stockholders’ equity.
c.
Preferred dividends are not paid until all common stockholders have received their dividends, so preferred dividends are not relevant in the formula and so must be taken out of the equation.
d.
Preferred dividends will reduce the amount of income available for distribution to common stockholders.
Chapter 11 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 11 - Prob. 1QCh. 11 - Prob. 2QCh. 11 - Explain each of the following terms: (a)...Ch. 11 - Differentiate between common stock and preferred...Ch. 11 - Explain the distinction between par value and...Ch. 11 - Define additional paid-in capital.Ch. 11 - Prob. 7QCh. 11 - Define treasury stock. Why do corporations acquire...Ch. 11 - How is treasury stock reported on the balance...Ch. 11 - What are the two basic requirements to support the...
Ch. 11 - Prob. 11QCh. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Katz Corporation has issued 400,000 shares of...Ch. 11 - Prob. 2MCQCh. 11 - Which of the following statements about stock...Ch. 11 - Prob. 4MCQCh. 11 - Prob. 5MCQCh. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - Which statement regarding dividends is false? a....Ch. 11 - Prob. 9MCQCh. 11 - Prob. 10MCQCh. 11 - Sources of Equity and Retained Earnings LO11-1...Ch. 11 - Computing the Number of Unissued Shares The...Ch. 11 - Earnings per Share Ratio How is the earnings per...Ch. 11 - Recording the Sale of Common Stock To expand...Ch. 11 - Prob. 11.5MECh. 11 - Determining the Effects of Treasury Stock...Ch. 11 - Determining the Amount of a Dividend Cole Company...Ch. 11 - Prob. 11.8MECh. 11 - Dividend Yield Ratio How is the dividend yield...Ch. 11 - Prob. 11.10MECh. 11 - Prob. 11.11MECh. 11 - Computing Shares Outstanding In a recent annual...Ch. 11 - Computing Number of Shares The charter of Vista...Ch. 11 - Prob. 11.3ECh. 11 - Reporting Stockholders Equity The financial...Ch. 11 - Reporting Stockholders Equity and Determining...Ch. 11 - Finding Amounts Missing from the Stockholders...Ch. 11 - Prob. 11.7ECh. 11 - Reporting Stockholders Equity Ruths Chris...Ch. 11 - Determining the Effects of Transactions on...Ch. 11 - Prob. 11.10ECh. 11 - Prob. 11.11ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Preparing the Stockholders Equity Section of the...Ch. 11 - Recording and Analyzing Treasury Stock...Ch. 11 - Prob. 11.16ECh. 11 - Prob. 11.17ECh. 11 - Computing Dividends on Preferred Stock and...Ch. 11 - Prob. 11.19ECh. 11 - Prob. 11.20ECh. 11 - Prob. 11.21ECh. 11 - Prob. 11.22ECh. 11 - Prob. 11.23ECh. 11 - Prob. 11.24ECh. 11 - Prob. 11.25ECh. 11 - Finding Missing Amounts At the end of the year,...Ch. 11 - Preparing the Stockholders Equity Section of the...Ch. 11 - Recording Transactions Affecting Stockholders...Ch. 11 - Prob. 11.4PCh. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Analyzing Treasury Stock Transactions Apple Inc....Ch. 11 - Comparing Stock and Cash Dividends Chicago Company...Ch. 11 - Prob. 11.9PCh. 11 - Prob. 11.10PCh. 11 - Recording and Comparing Cash Dividends, Stock...Ch. 11 - Prob. 11.12PCh. 11 - Prob. 11.1APCh. 11 - Prob. 11.2APCh. 11 - Prob. 11.3APCh. 11 - Prob. 11.4APCh. 11 - Recording and Reporting Stockholders Equity...Ch. 11 - Case A: The charter for Rogers, Incorporated,...Ch. 11 - Prob. 1BCOMPCh. 11 - Prob. 1CCOMPCh. 11 - Prob. 1DCOMPCh. 11 - Prob. 11.1CPCh. 11 - Prob. 11.2CPCh. 11 - Prob. 11.3CPCh. 11 - Computing Dividends for an Actual Company A recent...Ch. 11 - Prob. 11.5CPCh. 11 - Prob. 11.6CP
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- Which of the following does not decrease retained earnings? Select one: a. Stock dividends b. Cash dividends c. Net loss d. Net incomearrow_forwardWhich of the following is not one of the primary considerations management must make before a cash dividend is declared? O The availability of funds to pay the dividend. O The effect of inflation on the company and alternative uses of the cash to be paid for dividends. O The legal permissability of the dividend. O The tax impact on stockholders of the receipt of the dividends.arrow_forwardThe 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.arrow_forward
- Dividends do not properly measure the value created by a company. True OR False PLEASE explainarrow_forwardthe declaration of cash dividends and stock dividends both reduce retained earnings true falsearrow_forwardChoose the incorrect statement below: A. Retained earnings are the funds contributed by shareholders in excess of par or stated value.B. Equity is defined as the residual interest in the assets of an entity after deducting all of the liabilities.C. Conversion of preference shares into ordinary shares directly affects retained earnings.D. The statement of changes in equity is a formal statement that shows the movements in the elements or components of the shareholders' equity.arrow_forward
- Earnings that are not paid as dividends to stockholders and have cumulative amount are classified as A. non-paid earnings B. common earnings C. retained earnings D. preferredearningsarrow_forwardThe corporate valuation model cannot be used unless a company pays dividends. a. True b. Falsearrow_forwardWhich of the following is false? a. Under GAAP, companies cannot record gains on transactions involving their own shares. b. Under IFRS, companies cannot record gains on transactions involving their own shares. c. Under IFRS, the statement of stockholders’ equity is a required statement. d. Under IFRS, a company records a revaluation surplus when it experiences an increase in the price of its common stock.arrow_forward
- 19. Which of the following statements relating to earnings per share is not true? __________ It is an often-reported measure of the potential return to stockholders. It is a financial measure. It is a cash measure. It is based on the accrual basis of accounting.arrow_forward?With regard to stock dividend, which of the following is true .Reduces a corporation's assets and stockholders' equity A .Does not affect total equity, but transfer amounts between the components of equity.B „The decision to declare a stock dividend resides with the shareholders .C Transfers a portion of equity from retained earnings to a cash reserve account.Darrow_forwardAll of the following are correct regarding stock dividends except: 1) total stockholders’ equity is the same before and after the stock dividend. 2) they usually result in a decrease in the stock price. 3) they are not taxable to the issuing corporation or the shareholders. 4) they result in a real economic gain in cash to the shareholders.arrow_forward
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