Which of These Is a Noncash Payment Made by a Firm

question 25

Multiple Choice

Which of these is a noncash payment made by a firm to its shareholders that lessens the value of each outstanding share?

• A)Reverse stock split
• B)Cash distribution
• C)Stock dividend
• D)Regular dividend
• E)Liquidating dividend

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Definitions:

Merchandising Company

A business entity that purchases finished products and sells them to consumers without changing the form or nature of the goods.

Service Company

A business that generates revenue through the provision of services rather than selling physical products.

Sales Returns And Allowances

Transactions where a customer returns goods to the seller or receives a reduction in the invoice price, thereby reducing the seller's sales revenue.

Sales Discounts

Reductions in the amount charged to customers as an incentive for early payment, recorded as a deduction from gross sales to calculate net sales.