ACCT 211 FINAL EXAM
1. Retained Earnings of $100,000 represents a corporation’s cumulative earnings
__________ and is shown on the __________.
a) Spent, Income Statement
b) Earned, Cash Flow Statement
c) Kept, Balance Sheet ✅
d) Lost, Trial Balance
2. Investors earn a return on stock investments by:
a) Voting in shareholder meetings
b) Receiving management bonuses
c) Receiving dividends and selling stock for more than it cost ✅
d) Avoiding taxes on gains
3. A corporation records an increase in dividends on the __________ date.
a) Payment
b) Record
c) Declaration ✅
d) Closing
4. The date that determines who will receive a dividend is the __________ date.
a) Declaration
b) Record ✅
c) Payment
d) Issue
5. A corporation _________ have a legal obligation to pay dividends.
a) Always
b) Sometimes
c) Does not ✅
d) Must
, 6. The financial statement that summarizes stockholders' equity over time is called the:
a) Balance Sheet
b) Statement of Cash Flows
c) Statement of Retained Earnings
d) Statement of Stockholders’ Equity ✅
7. Dividends payable is what type of account and has what balance?
a) Asset, Debit
b) Expense, Debit
c) Liability, Credit ✅
d) Equity, Credit
8. What is the journal entry to record a dividend on the declaration date?
a) Debit Cash, Credit Dividends
b) Debit Dividends, Credit Dividends Payable ✅
c) Debit Dividends Payable, Credit Dividends
d) Debit Retained Earnings, Credit Cash
9. What happens to liabilities on the dividend declaration date?
a) They decrease
b) They are unaffected
c) They are converted to equity
d) They increase ✅
10. What happens to current assets on the payment date?
a) They increase
b) They remain the same
c) They are converted into liabilities
d) They decrease ✅
11. When a corporation issues stock above par value, what happens?
a) A debit to common stock
b) A credit to additional paid-in capital ✅
c) A debit to treasury stock
d) A credit to retained earnings
1. Retained Earnings of $100,000 represents a corporation’s cumulative earnings
__________ and is shown on the __________.
a) Spent, Income Statement
b) Earned, Cash Flow Statement
c) Kept, Balance Sheet ✅
d) Lost, Trial Balance
2. Investors earn a return on stock investments by:
a) Voting in shareholder meetings
b) Receiving management bonuses
c) Receiving dividends and selling stock for more than it cost ✅
d) Avoiding taxes on gains
3. A corporation records an increase in dividends on the __________ date.
a) Payment
b) Record
c) Declaration ✅
d) Closing
4. The date that determines who will receive a dividend is the __________ date.
a) Declaration
b) Record ✅
c) Payment
d) Issue
5. A corporation _________ have a legal obligation to pay dividends.
a) Always
b) Sometimes
c) Does not ✅
d) Must
, 6. The financial statement that summarizes stockholders' equity over time is called the:
a) Balance Sheet
b) Statement of Cash Flows
c) Statement of Retained Earnings
d) Statement of Stockholders’ Equity ✅
7. Dividends payable is what type of account and has what balance?
a) Asset, Debit
b) Expense, Debit
c) Liability, Credit ✅
d) Equity, Credit
8. What is the journal entry to record a dividend on the declaration date?
a) Debit Cash, Credit Dividends
b) Debit Dividends, Credit Dividends Payable ✅
c) Debit Dividends Payable, Credit Dividends
d) Debit Retained Earnings, Credit Cash
9. What happens to liabilities on the dividend declaration date?
a) They decrease
b) They are unaffected
c) They are converted to equity
d) They increase ✅
10. What happens to current assets on the payment date?
a) They increase
b) They remain the same
c) They are converted into liabilities
d) They decrease ✅
11. When a corporation issues stock above par value, what happens?
a) A debit to common stock
b) A credit to additional paid-in capital ✅
c) A debit to treasury stock
d) A credit to retained earnings
