A Liquidating Dividend Is

question 175

Multiple Choice

A liquidating dividend is:

• A)Only declared when a corporation closes down.
• B)A return of a part of the original investment back to the stockholders.
• C)Not allowed under federal law.
• D)Only paid in assets other than cash.
• E)Only paid in shares of stock.

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand within a business for minor, day-to-day expenses.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Highly Liquid Investments

Investments that can be quickly converted into cash without a significant loss in value.

Specific Amount

A precise quantity or financial figure identified within a transaction or financial statement, not generalized or estimated.