When a Share Dividend Is Declared There Is

question 4

Multiple Choice

When a share dividend is declared there is:

• A)a decrease in total shareholders' equity
• B)no change in total shareholders' equity
• C)an increase in retained earnings
• D)an increase in total shareholders' equity

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Definitions:

Indirect Method

A financial reporting technique used in cash flow statements to adjust net income for changes in non-cash accounts to identify the actual cash inflow or outflow from operating activities.

Cash Dividends

Distributions of a corporation's earnings to shareholders in the form of cash.

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking down the analysis to operating, investing, and financing activities.

Operating Activities

Activities directly related to the primary operations of a business, including production, sales, and distribution, which are reflected in its cash flow.