Which entry does a corporation record on the date it declares a cash dividend?

Debit Retained Earnings (or Cash Dividends); credit Dividends Payable

Debit Dividends Payable; credit Cash

Debit Cash; credit Retained Earnings

No entry until the dividend is paid

Accounting & finance

FBLA Advanced Accounting practice test

Advanced Accounting goes past the basic cycle into corporate, managerial, and cost accounting. Expect stock and dividend transactions, partnerships, cost-volume-profit analysis, and budgeting, all assuming you already know the fundamentals well.

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Topics on the FBLA Advanced Accounting test

Corporate stock, dividends, and retained earnings
Partnership formation, income division, and liquidation
Job order and process costing
Cost-volume-profit and break-even analysis
Budgeting and variance analysis
Financial statement analysis and ratios

Free FBLA Advanced Accounting practice questions and answers

Try each question before opening the answer. Every AI practice test explains its answers the same way.

Question 1
A product sells for $50 per unit with variable costs of $30 per unit. Fixed costs are $40,000. What is the break-even point in units?
1. A800
2. B1,333
3. C2,000
4. D4,000
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Answer: C. 2,000
The contribution margin is $50 − $30 = $20 per unit, and $40,000 ÷ $20 = 2,000 units.
Question 2
Which entry does a corporation record on the date it declares a cash dividend?
1. ADebit Retained Earnings (or Cash Dividends); credit Dividends Payable
2. BDebit Dividends Payable; credit Cash
3. CDebit Cash; credit Retained Earnings
4. DNo entry until the dividend is paid
Show answerHide answer
Answer: A. Debit Retained Earnings (or Cash Dividends); credit Dividends Payable
Declaring the dividend creates a liability. On the payment date the company debits Dividends Payable and credits Cash.
Question 3
A company has current assets of $90,000 and current liabilities of $45,000. What is its current ratio?
1. A0.5 : 1
2. B1.5 : 1
3. C2 : 1
4. D45 : 1
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Answer: C. 2 : 1
Current ratio = current assets ÷ current liabilities = $90,000 ÷ $45,000 = 2 : 1.

How to study for FBLA Advanced Accounting

Memorize the core formulas (contribution margin, break-even, current ratio, return on investment) until you can write them from memory, then drill multi-step problems against the clock.

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FBLA Advanced Accounting FAQ

How many questions are on the FBLA Advanced Accounting test?

Advanced Accounting is an objective test event. Under the current guidelines, FBLA objective tests are typically 100 multiple-choice questions in 50 minutes. Check the official FBLA competitive event guidelines for your season and conference.

What topics are on the FBLA Advanced Accounting test?

Expect questions on corporate stock, dividends, and retained earnings; partnership formation, income division, and liquidation; job order and process costing; cost-volume-profit and break-even analysis; budgeting and variance analysis; and financial statement analysis and ratios.

Are these official FBLA Advanced Accounting questions?

No. The sample questions are original and written in the style of FBLA objective tests. TierOne is an independent study aid and is not affiliated with FBLA.