Question

TRUE or FALSE

- Liability accounts will always be debited when debts are paid during the liquidation process.

- Partners can sell their equity

- Dividends are recorded on their date of declaration.

- Stock splits reduce retained earnings

- All corporations are owned by stockholders

Answer 1

1. False Liablities account is debited when debt is paid reducing the liabilities of the companu but not always sometimes the debt is forgiven since we debit the liablities but debt is not actually paid

2. True Partners can sell their equity without anyone's consent unless in case of limited partnership

3. True Dividend are recorded on their date of declaration beacuse on that date the company becomes owed to the shareholders

4. False Stock splits only increases the number of shares only but does not reduce the retained earnings

5. False Corporations are owned by the shareholders of the corporation stockholders are the persons who have interest in the corporation by any means