indicate whether each of the following is true t or false f 617481

1.

A cash dividend is a pro rata distribution of cash to stockholders.

2.

A dividend based on paid-in capital is termed a liquidating dividend.

3.

The date that the board of directors formally declares a cash dividend is the date of record.

4.

Dividends Payable is a current liability because it will normally be paid within the next several months.

5.

A stock dividend results in a decrease in retained earnings and an increase in paid-in capital.

6.

Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders’ equity section.

7.

A stock split must be formally journalized.

8.

A net loss is credited to Retained Earnings in preparing closing entries.

9.

Retained earnings restrictions are generally disclosed in the notes to the financial statements.

10.

A prior period adjustment is reported as an adjustment of the beginning balance of Retained Earnings.

11.

The return on common stockholders’ equity ratio shows how many dollars of net income were earned for each dollar invested by the owners.

12.

Income tax expense and the related liability for income taxes payable are recorded when taxes are paid.

13.

Earnings per share is reported only for common stock.

14.

If a company has declared any preferred dividends, they should be added to net income in the calculation of earnings per share.