Which of the following statements about property dividends is not true?

a. A property dividend is usually in the form of securities of other companies.

b. A property dividend is also called a dividend in kind.

c. The accounting for a property dividend should be based on the carrying value (book

value) of the nonmonetary assets transferred.

d. All of these statements are true.

Question

Business

Corky

1 October, 22:04

Which of the following statements about property dividends is not true?

a. A property dividend is usually in the form of securities of other companies.

b. A property dividend is also called a dividend in kind.

c. The accounting for a property dividend should be based on the carrying value (book

value) of the nonmonetary assets transferred.

d. All of these statements are true.

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Answers (1)

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Lee Shepard · Answer 1

c. The accounting for a property dividend should be based on the carrying value (book

value) of the non-monetary assets transferred.

Explanation:

As per the Generally Accepted Accounting Principles which states the basic laws for accounting any transaction, states that,

The property dividends that is dividend distributed not in cash but dividend in the form of property like land and building, securities, other assets, etc: shall be recorded at net fair value.

These dividend are not recorded at carrying book values of the property given.