A Shareholder's Obligation to Repay an Illegally Declared Dividend Depends

question 30

Multiple Choice

A shareholder's obligation to repay an illegally declared dividend depends on:

• A) the shareholder's good or bad faith in accepting the dividend.
• B) the solvency or insolvency of the corporation and,in some instances,special statutory provisions.
• C) the shareholder's knowledge of the facts.
• D) All of these.

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Definitions:

Cash Over and Short

An account that records the discrepancies between the expected cash count and the actual amount of cash received or paid out, indicating errors or theft.

Outstanding Checks

Checks that have been written and recorded in the checking account but have not yet been cashed or cleared by the bank.

Payee

The side in a financial exchange that is given the payment.

Bank

A financial institution licensed to receive deposits and provide loans, along with offering various other financial services.