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Financial Accounting MCQs

Reggy Company expects to have a record year, with net income increasing by 20 percent. Reggy would like to share this increase with stockholders, how would Reggy record this? As a:

dividend payable in the current liabilities section of the balance sheet.

dividend payable in the stockholders section of the income statement.

contingent liability as the payment is not reasonably estimable and the stockholders will not be known until the payment date.

dividend expense in the operating section of the income statement.

Answer

Correct Answer: dividend payable in the current liabilities section of the balance sheet.

Explanation:

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