lOMoARcPSD|28964921
Practical - solutions for online quiz 2
Accounting and Financial Management 1A (University of New South Wales)
Studocu is not sponsored or endorsed by any college or university
Downloaded by john gatheca ()
, lOMoARcPSD|28964921
6/18/2014 Online Quiz 2
Moodle Home
School of Accounting Announcements i
Australian School of Business
User Guides
ACCT1501-Accounting and Financial Management 1A - Session 1, 2014
You are logged in as Helen Vu (Logout)
My courses UNSWA
COMM
ACCT
-ACCT1501-5144_00003
University
- Australian
- SchoolofofSchool
New
Accounting
South
of Business
Wales
Online Quizzes Online Quiz 2
Quiz navigation Started on Tuesday, 15 April 2014, 4:31 PM
1 2 3 4 5 6 7 8 9 10 11 State Finished
12 13 14 15 16 17 18 19 20
Completed on Wednesday, 16 April 2014, 6:56 PM
Finish review
Time taken 1 day 2 hours
Grade 15.00 out of a maximum of 20.00 (75%)
Question 1 A company declares and pays an interim dividend.
Correct This transaction will:
Mark 1.00 out of
Select one:
1.00
a. decrease total assets and total shareholders' equity
Flag question
but have no effect on profit Dividends are a
distribution of a corporation's profits to its
shareholders. Dividends are not an expense of a
corporation and, therefore, dividends do not reduce
taxable income or net profit. Dividends on ordinary
shares are not legally required; therefore, unlike other
expenses and liabilities, if a corporation does not
declare a dividend there are no adverse legal
ramifications for omitted dividends.
A company would make the following entry when
declaring and paying a dividend:
Dr Retained Earnings xx
Cr Cash xx
Remember, Retained Earnings = Opening Retained
Earnings + Net Profit/Loss for the period - Dividends.
Thus, when dividends are declared, retained earnings
is debited (decreased), regardless of whether the
dividend is or is not paid immediately.
The answer is A because Assets decrease (cash
decreases) and shareholders' Equity decreases
(Retained earnings decreases).
b. decrease total assets, total shareholders' equity
and profit
c. decrease total assets but have no effect on profit or
shareholders' equity
d. none of the above
The correct answer is: decrease total assets and total
shareholders' equity but have no effect on profit
Question 2 Retained profits of Livermore Pty Ltd at 1 July 2010
Incorrect were $5500. The accounting records for year ended
30 June 2011 showed the following information:
Mark 0.00 out of
http://moodle.telt.unsw.edu.au/mod/quiz/review.php?attempt=409844 1/14
Downloaded by john gatheca ()
Practical - solutions for online quiz 2
Accounting and Financial Management 1A (University of New South Wales)
Studocu is not sponsored or endorsed by any college or university
Downloaded by john gatheca ()
, lOMoARcPSD|28964921
6/18/2014 Online Quiz 2
Moodle Home
School of Accounting Announcements i
Australian School of Business
User Guides
ACCT1501-Accounting and Financial Management 1A - Session 1, 2014
You are logged in as Helen Vu (Logout)
My courses UNSWA
COMM
ACCT
-ACCT1501-5144_00003
University
- Australian
- SchoolofofSchool
New
Accounting
South
of Business
Wales
Online Quizzes Online Quiz 2
Quiz navigation Started on Tuesday, 15 April 2014, 4:31 PM
1 2 3 4 5 6 7 8 9 10 11 State Finished
12 13 14 15 16 17 18 19 20
Completed on Wednesday, 16 April 2014, 6:56 PM
Finish review
Time taken 1 day 2 hours
Grade 15.00 out of a maximum of 20.00 (75%)
Question 1 A company declares and pays an interim dividend.
Correct This transaction will:
Mark 1.00 out of
Select one:
1.00
a. decrease total assets and total shareholders' equity
Flag question
but have no effect on profit Dividends are a
distribution of a corporation's profits to its
shareholders. Dividends are not an expense of a
corporation and, therefore, dividends do not reduce
taxable income or net profit. Dividends on ordinary
shares are not legally required; therefore, unlike other
expenses and liabilities, if a corporation does not
declare a dividend there are no adverse legal
ramifications for omitted dividends.
A company would make the following entry when
declaring and paying a dividend:
Dr Retained Earnings xx
Cr Cash xx
Remember, Retained Earnings = Opening Retained
Earnings + Net Profit/Loss for the period - Dividends.
Thus, when dividends are declared, retained earnings
is debited (decreased), regardless of whether the
dividend is or is not paid immediately.
The answer is A because Assets decrease (cash
decreases) and shareholders' Equity decreases
(Retained earnings decreases).
b. decrease total assets, total shareholders' equity
and profit
c. decrease total assets but have no effect on profit or
shareholders' equity
d. none of the above
The correct answer is: decrease total assets and total
shareholders' equity but have no effect on profit
Question 2 Retained profits of Livermore Pty Ltd at 1 July 2010
Incorrect were $5500. The accounting records for year ended
30 June 2011 showed the following information:
Mark 0.00 out of
http://moodle.telt.unsw.edu.au/mod/quiz/review.php?attempt=409844 1/14
Downloaded by john gatheca ()
