Which of These Is Not a Reason for Declaring a Share

question 58

Multiple Choice

Which of these is not a reason for declaring a share dividend?

• A) To raise extra capital for the company.
• B) To stave off a takeover.
• C) To conserve the company's cash instead of declaring a cash dividend.
• D) To decrease the market price of the shares.

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Definitions:

Journal Entries

Recorded transactions in the accounting records of a business that are used to transfer amounts from one account to another, ensuring the ledger remains in balance.

Fair Value

Fair value is an estimate of the market value of an asset, based on its current price in a fair and open market transaction.

Bonus Method

A method in accounting for partnerships where a new partner's investment is recorded at an amount that is different from the stated value of the partnership's net assets, affecting the capital accounts of the existing partners.

Journal Entry

A journal entry is a record of a business transaction in the accounting books, detailing the financial effects of that transaction.