Corporations: Dividends, Retained Earnings, and Income Reporting - Accounting
Card 0 of 6
A company provides 
of services in April and is paid for these services in June. Which of the following is correct?
A company provides
Revenue is recorded in the period that services are earned or goods are delivered,not in the period that cash is received; therefore, the company will record an increase in revenue of 
and an increase in accounts receivable of 
in the month of April. On the other hand, the company will record an increase in cash of 
and a decrease in accounts receivable of 
in the month of June.
Revenue is recorded in the period that services are earned or goods are delivered,not in the period that cash is received; therefore, the company will record an increase in revenue of
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Which of the following is true regarding retained earnings?
Which of the following is true regarding retained earnings?
Net income increases retained earnings; therefore, net income is considered to be credit. Dividends, once declared, decrease retained earnings. Last, preferred stock is not accounted in retained earnings.
Net income increases retained earnings; therefore, net income is considered to be credit. Dividends, once declared, decrease retained earnings. Last, preferred stock is not accounted in retained earnings.
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For the current year, The Echo Company possessed the following income:
In the Echo Company's current year taxable income, how much should be included for dividends received?
For the current year, The Echo Company possessed the following income:
In the Echo Company's current year taxable income, how much should be included for dividends received?
This problem is asking us to determine the amount of dividends to be included in the Echo Company's taxable income for the current year. The dividends were received from 20%-owned taxable domestic corporations; therefore, they are eligible for an 80% dividends received deduction. We can compute this value using the following formula:
This problem is asking us to determine the amount of dividends to be included in the Echo Company's taxable income for the current year. The dividends were received from 20%-owned taxable domestic corporations; therefore, they are eligible for an 80% dividends received deduction. We can compute this value using the following formula:
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A company provides of services in April and is paid for these services in June. Which of the following is correct?
A company provides
Revenue is recorded in the period that services are earned or goods are delivered,not in the period that cash is received; therefore, the company will record an increase in revenue of and an increase in accounts receivable of in the month of April. On the other hand, the company will record an increase in cash of and a decrease in accounts receivable of in the month of June.
Revenue is recorded in the period that services are earned or goods are delivered,not in the period that cash is received; therefore, the company will record an increase in revenue of
Compare your answer with the correct one above
Which of the following is true regarding retained earnings?
Which of the following is true regarding retained earnings?
Net income increases retained earnings; therefore, net income is considered to be credit. Dividends, once declared, decrease retained earnings. Last, preferred stock is not accounted in retained earnings.
Net income increases retained earnings; therefore, net income is considered to be credit. Dividends, once declared, decrease retained earnings. Last, preferred stock is not accounted in retained earnings.
Compare your answer with the correct one above
For the current year, The Echo Company possessed the following income:
In the Echo Company's current year taxable income, how much should be included for dividends received?
For the current year, The Echo Company possessed the following income:
In the Echo Company's current year taxable income, how much should be included for dividends received?
This problem is asking us to determine the amount of dividends to be included in the Echo Company's taxable income for the current year. The dividends were received from 20%-owned taxable domestic corporations; therefore, they are eligible for an 80% dividends received deduction. We can compute this value using the following formula:
This problem is asking us to determine the amount of dividends to be included in the Echo Company's taxable income for the current year. The dividends were received from 20%-owned taxable domestic corporations; therefore, they are eligible for an 80% dividends received deduction. We can compute this value using the following formula:
Compare your answer with the correct one above