DIVIDENDS

Question 1

Preference share capital that participates in the excess dividends after paying both preference and ordinary shares their regular dividends

Answer 1

Participating Preference Share Capital

Question 2

Amount earned by shareholders during a given period for each ordinary share held

Answer 2

Earning per Share

Question 3

A cumulative preference share capital is entitled to payment of dividends in arrears

Answer 3

TRUE

Question 4

Unpaid dividends of prior years

Answer 4

Dividends in Arrears

Question 5

Also known as legal capital

Answer 5

Share Capital

Question 6

Earnings per share is computed for both preference and ordinary shares

Answer 6

FALSE

Question 7

Donated Capital is reported as part of

Answer 7

Additional Paid-in Capital

Question 8

Dividends in arrears on preference shares are reported in the financial statements as a

Answer 8

Footnote to Financial Statements

Question 9

The amount recorded as reduction in Retained Earnings on a property dividend declaration

Answer 9

Carrying Value

Question 10

The peso equity in corporate capital for each share capital owned by a shareholder is known as

Answer 10

Book Value per share

Question 11

Capital arising from profitable operations of the corporation

Answer 11

Retained Earnings

Question 12

Dividends distributable in the form of non-cash assets

Answer 12

Property Dividends

Question 13

A share capital dividend decreases retained earnings but it increases contributed capital

Answer 13

TRUE

Question 14

When the outstanding preference share capital is multiplied by the participation rate, the result is

Answer 14

Maximum allowed participation

Question 15

The type of dividend that does not affect total assets and total shareholders’ equity

Answer 15

Stock Dividend

Question 16

Capital arising from investment by shareholders

Answer 16

Contributed Capital

Question 17

A share capital dividend representing less than 20% of the outstanding stock if the corporation

Answer 17

Small Share Capital Dividend

Question 18

The account used for the declared but not yet distributed stock dividend

Answer 18

Stock Dividend Distributable

Question 19

When a corporation declares a cash dividend, the entry include a

Answer 19

debit to Retained Earnings

Question 20

An appropriation of retained earnings reduces the total amount of retained earnings

Answer 20

FALSE

Question 21

Corporate earnings distributed to shareholders in the form of cash, non-cash assets, or the corporation’s own shares

Answer 21

Dividends

Question 22

The excess of fair value over the par value of share capital in a small stock dividend

Answer 22

Paid-in Capital from Stock Dividend

Question 22

Retained Earnings available for distribution as dividends to shareholders

Answer 22

Unappropriated Retained Earnings

Question 23

a deferred cash dividend

Answer 23

Scrip Dividends

Question 24

The type of Dividend that does not affect total assets and total shareholders’ equity is

Answer 24

Share Capital Dividend

Question 25

Contributions by shareholders in excess of the par or stated value of the share capital

Answer 25

Share Premium

Question 26

A debit balance in the Retained Earnings account

Answer 26

Deficit

Question 27

Retained earnings set aside for a specific purposes

Answer 27

Appropriated Retained Earnings

Question 28

Dividends representing return of shareholders’ investment

Answer 28

Liquidating Dividend

Question 29

The normal balance of Retained Earnings is credit. Therefore, it can never have a debit balance

Answer 29

FALSE