The board of directors of Acme, Inc. authorizes a $50,000 cash dividend to its 100,000 shares of common stock. The stock issued is recorded as a journal entry that will include whi... The board of directors of Acme, Inc. authorizes a $50,000 cash dividend to its 100,000 shares of common stock. The stock issued is recorded as a journal entry that will include which of the following?
Understand the Problem
The question is asking for clarification on various accounting terms related to the treatment of common diluted payable shares. It seems to be part of a checklist or form concerning financial reporting.
Answer
Debit to Retained Earnings; Credit to Common Dividend Payable.
The journal entry will include a debit to Retained Earnings and a credit to Common Dividend Payable.
Answer for screen readers
The journal entry will include a debit to Retained Earnings and a credit to Common Dividend Payable.
More Information
The declaration of a cash dividend involves adjusting the company's Retained Earnings and establishing a liability of Dividends Payable until the payment is made.
Tips
Make sure to correctly identify the stages of dividend transactions: declaration and payment.
Sources
- Solved Select all that apply | Chegg.com - chegg.com
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