1) The closing entry for a corporation reporting a net loss of $23,000 involves a credit to Retained Earnings for $23,000.
2) The retained earnings account equals all previous periods' net earnings plus any dividends declared less prior losses.
3) Retained earnings can be invested by shareholders.
4) All dividends declared by a corporation require a payment of cash.
5) Stock dividends are similar to cash dividends in that assets of the corporation are transferred to the shareholders.
6) One of the main reasons for stock dividends is to continue dividends but to retain cash.
7) In a stock dividend equity moves from common shares to retained earnings.
8) The value assigned to a stock dividend is the market value on the declaration of the shares to be distributed as a stock dividend.
9) The statement of Retained Earnings will always show an increase for dividends declared in the year.
10) Stock dividends decrease total shareholders' equity.