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    Cash and Stock Dividends

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    Discuss cash dividends and stock dividends. How is each recorded? When each is issued, what is the effect it may have on assets, liabilities and owner's equity?

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    Dividend is the appropriation of the profits to the shareholders. There are two types of dividends:
    1) Cash dividend 2) Stock dividend

    Recording of cash dividend:
    I. Dividend is paid in form of cash.

    1) On authorization of dividend:
    Retained earnings ...

    Solution Summary

    This solution discusses cash dividends and stock dividends, explaining how each is recorded and the effect that each has on assets, liabilities, and owner's equity.