Question

1. payment of a dividend decreases both cash and stockholders equity of the distributing business. a. true b. false 22. a t - account for cash cannot contain any credits. a. true b. false 23. the normal balance of the dividends account is a credit. a. true b. false 24. the general ledger is sometimes called the book of original entry because it is the accounting record where transactions are first recorded. a. true b. false 25. a trial balance can be distributed to stockholders in place of the balance sheet. a. true b. false 26. all transactions refer to external events. a. true b. false 27. not all recognizable events are supported by a standard source document. a. true b. false 28. a trial balance is a financial statement. a. true b. false

Explanation:

1. When a dividend is paid, cash (an asset) decreases as money is distributed, and retained - earnings (part of stockholders' equity) also decreases.
2. A cash account can have credit entries, for example, when cash is paid out.
3. The dividends account is a contra - equity account and has a debit normal balance, not a credit.
4. The general journal is the book of original entry, not the general ledger.
5. A trial balance is not a financial statement and cannot be distributed to stockholders instead of the balance sheet.
6. Transactions can also refer to internal events, like depreciation.
7. Some events, like estimates, may not have a standard source document.
8. A trial balance is a list of accounts and their balances, not a financial statement.

Answer:

1. a. True
2. b. False
3. b. False
4. b. False
5. b. False
6. b. False
7. a. True
8. b. False