21 which of the following transactions wouldnot result in a decrease to retained ear 4314620

21.Which of the following transactions wouldNOT result in a decrease to retained earnings?

a) declaration and issuance of a stock dividend

b) incurrence of a net loss for the period

c) reacquisition ofshares for less than the original issue price

d) correctionof an error in which depreciation expense was understated in a prior period

22.Which of the following transactions wouldNOT result in an increase to retained earnings?

a) correction of an error in which expenses were overstated in a previous year

b) issuance of a 3-for-1 stock split

c) reacquisition ofshares for less than the original issue price

d) earningof net income for the period

23.Which of the following statements is NOT generally true about the legality of dividend distributions?

a) No amounts may be distributed unless the corporate capital is left intact.

b) The corporation must still be able to pay its liabilities when they become due.

c) A corporation may not pay dividends that are higher than their legally available retained earnings.

d) Dividends do not need to be formally approved by the Board of Directors.

24.An entry for dividends is NOT made on the

a) date of declaration.

b) date of record.

c) date of payment (cash dividends).

d) date of distribution (stock dividends).

25.Cash dividends are paid on the basis of the number of shares

a) authorized.

b) issued.

c) outstanding.

d) outstanding less the number of treasury shares.

26.Jesse Corp. owns 4,000,000 shares of James Corp. On December 31, 2017, Jesse distributed these shares as a dividend to its shareholders. This is an example of a

a) property dividend.

b) stock dividend.

c) liquidating dividend.

d) cash dividend.

27.Which of the following statements about property dividends is FALSE?

a) A property dividend is a nonreciprocal transfer of nonmonetary assets.

b) A property dividend is also called a dividend in kind.

c) The accounting for a property dividend should be based on the carrying value (book value) of the nonmonetary assets transferred.

d) The accounting for a property dividend should be based on the fair value of the nonmonetary assets transferred.

28.The fair value of a property dividend should NOT be determined by

a) estimated realizable values in cash transactions involving similar assets.

b) quoted market prices.

c) independent appraisals.

d) arbitrary values assigned by the Board of Directors.

29.Declaration and issuance of a stock dividend

a) has no effect on total assets, liabilities, or shareholders' equity.

b) decreases the amount of working capital.

c) decreases total shareholders' equity.

d) increases the current ratio.

30.If a corporation wishes to “capitalize” part of their earnings, it may issue a

a) cash dividend.

b) stock dividend.

c) property dividend.

d) liquidating dividend.