Elaine Matuszek,the sole stockholder of Matuszek Consulting,received a $2,000 dividend from the company.Identify the general journal entry below that Matuszek Consulting will make to record the transaction.
A) $\begin{array}{|l|r|r|}
\hline \text { Dividends } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}$
B) $\begin{array}{|l|r|r|}
\hline \text { Common Stock } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}$
C) $\begin{array}{|l|r|r|}
\hline \text { Dividends } & 2,000 & \
\hline \text { Common Stock } & & 2,000 \
\hline
\end{array}$
D) $\begin{array}{|l|r|r|}
\hline \text { Cash } & 2,000 & \
\hline \text { Common Stock } & & 2,000 \
\hline
\end{array}$
E) $\begin{array}{|l|r|r|}
\hline \text { Cash } & 2,000 & \
\hline \text { Dividends } & & 2,000 \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

When a company pays a dividend, it decreases its cash account (an asset) and records the payment in the dividends account (which reduces equity). This is represented by debiting the Dividends account and crediting the Cash account.

Elaine Matuszek,the Sole Stockholder of Matuszek Consulting,received a $2,000 Dividend Dividends 2,000 Cash 2,000\begin{array}{|l|r|r|}\hline \text { Dividends } & 2,000 & \\\hline \text { Cash } & & 2,000 \\\hline\end{array} Dividends Cash ​2,000​2,000​​

Elaine Matuszek,the Sole Stockholder of Matuszek Consulting,received a $2,000 Dividend $\begin{array}{|l|r|r|}\hline \text { Dividends } & 2,000 & \\\hline \text { Cash } & & 2,000 \\\hline\end{array}$