Question

Brown Company paid $40 in cash dividends.
Show how to record the transaction to the T-accounts by completing the following sentence.
Dividends would be _________ (debited/credited) on the ________ (left/right) side of the T-account, and Cash would be _________ (debited/credited) on the _________ (left/right) side of the T-account.

Answer 1

Answer:

Debited, left and credited, right

Explanation:

The journal entry is shown below:

Dividend A/c Dr $40

             To Cash A/c $40

(Being dividend is paid in cash)

As we see that cash is paid that means cash would be credited and it is shown on the right hand side of the T account whereas the dividend is debited that is shown in the left hand side of the T account