Answer:
D. Debit to Dividends Payable.
Explanation:
The first thing we have to keep in mind is that dividends are liabilities, that is, they represent cash outflows for the corporation. In the example, we can distinguish two moments: the declaration of a cash dividend and its effective distribution. Next, we will analyze them from an accounting point of view:
- On July 15, 2014, Benson Company declared a cash dividend. In accounting terms, on that day the “Retained Earnings” account was debited. Remember that this account is the one that records the profits that the company has obtained to date. So, what was done was to <em>subtract</em> that part that is to be distributed among stockholders. This amount is then transferred to a current liability account called “Dividends Payable”. In this case, money was <em>added</em>, therefore, the account was credited.
- On August 15 dividends were distributed. That day, the "Dividends Payable" account was debited, or, in other words, its money was <em>discounted</em>, because it is now in the hands of shareholders.
<span>After a suspected identity fraud case has been resolved, you should continue to monitor your credit reports and accounts and keep all copies of relevant documentation. When you believe fraud has occurred it is best to make sure you keep copies of your last transactions and what transactions that are happening that aren’t yours. Monitoring your credit reports are imperative because you need to make sure someone isn’t charging their purchases to your credit cards. </span>
1.To record the purchase of inventory on account and the payment of freight charges.
Inventory4,000
Accounts payable4,000
Inventory300
Cash300
2. To record purchase returns.
Accounts payable600
Inventory600
3. To record cash sales and cost of goods sold.
Cash5,000
Sales revenue5,000
Cost of goods sold2,800
Inventory2,800
Exercise 8-2
1. To record the purchase of inventory on account and the payment of freight charges.
Purchases4,000
Accounts payable4,000
Freight-in300
Cash300
2. To record purchase returns.
Accounts payable600
Purchase returns600
3. To record cash sales.
Cash5,000
Sales revenue5,000
Answer:
<u>c) Goods shipped on consignment to another company </u>
Explanation:
- A physical inventory is the goods that are in stock and involve the counting and weighing and otherwise measuring of the third parties to the counting of inventory that is consigned to them.
- Physical inventory is also called as a perpetual inventory where all the goods are counted along with the business stocks. It also checks that the goods are not being lost or stolen.
