Question Details

A dividend based on paid-in capital is termed a liquidating dividend.




1.	Under the cost method, Treasury Stock is debited at the price paid to reacquire the shares, and the same amount is credited to Treasury Stock when the shares are sold.



	2.	A dividend based on paid-in capital is termed a liquidating dividend.


	3.	Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders' equity section.



	4.	A prior period adjustment is reported as an adjustment of the beginning balance of Retained Earnings.



	5.	In the stockholders’ equity section, paid-in capital and retained earnings are reported and the specific sources of paid-in capital are identified.







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