When a Corporation Distributes a Dividend, the

question 156

Multiple Choice

When a corporation distributes a dividend, the

• A)most common form of distribution is a cash dividend.
• B)Dividends account will be increased with a credit.
• C)Retained Earnings account will be directly increased with a debit.
• D)Dividends account will be decreased with a debit.

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Definitions:

Fixed Cost

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Units Produced

The total quantity of items manufactured by a company during a specific period.

Total Fixed Costs

The cumulative sum of all business expenses that are consistent and do not vary with the level of output, including overheads like rent, salaries, and utilities.

Level Of Activity

The volume of output or production activity attained within a specified period, often used to measure the efficiency and capacity utilization of a business.