Two basic requirements to support the declaration of a cash dividend are:-
1) Retained earning accounts should have a positive balance greater than dividends, as dividend can be issued only from free reserves.
2) the cash account has a balance greater than the amount of dividend declared, as we have to pay cash for dividend in the near future
Cash dividends affect cash and equity on the balance sheet. Retained earnings and cash are deducted by the sum of dividends. Equity dividends do not affect a company's liquidity, only the equities section of the balance sheet.
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The correct answer to your question is letter B. If accounts payable is increased with a credit, the normal balance is a credit.
Answer:
True
Explanation:
That is true for any product but luxury products.
Answer:
The interest expense should be recognized on the zero-interest-bearing promissory note is 22.000
Explanation:
Interest expense = (Fair value of the land * Interest rate)
Supposing a interest rate of 11% we get:
Interest expense = 200.000 * 11% = 22.000
