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Cash dividends payable began the year at $8,000, dividends of $3,000 were declared, and the ending payable was $5,000. How much cash was paid for dividends?
A$3,000
B$6,000
C$16,000
D$10,000
Answer & Solution
Correct answer: B. $6,000
1. Cash paid = beginning payable + dividends declared − ending payable.
2. = $8,000 + $3,000 − $5,000.
3. = $11,000 − $5,000 = $6,000.
4. Trap: $3,000 (option B) uses only the declared amount and ignores the change in the payable balance.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §7.2.3 "Financing Activities Section", p.276_
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