Which of the Following Is True About Dividends

question 58

Multiple Choice

Which of the following is true about dividends?

• A) Cash or property dividends, once declared, can be revoked.
• B) Officers of the corporation may opt to retain profits for corporate purposes instead of as dividends.
• C) Shareholders can sue to recover undeclared and paid dividends.
• D) Dividends are paid at the discretion of the board of directors.

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Definitions:

Bonus Dividends

Additional dividends paid to shareholders, above regular dividends, typically issued in the form of extra shares.

Revaluation

An adjustment of the carrying value of an asset or liability to its current fair value.

Consolidated Statement

A financial statement that presents the financial position and results of operations of a parent and its subsidiaries as if they were a single economic entity.

General Reserve

Funds set aside by a company from its profits for general unspecified future needs or to strengthen the company's financial position.