Which of the Following Statements About a Cash Dividend Is

question 44

Multiple Choice

Which of the following statements about a cash dividend is incorrect?

• A) The legality of a cash dividend depends on government laws.
• B) The legality of a dividend does not indicate a company's ability to pay a dividend.
• C) Dividends are not a liability until declared.
• D) Shareholders usually vote to determine the amount of income to be distributed in the form of a dividend.

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Definitions:

Sales Taxes

Taxes imposed by governments on the sale of goods and services, collected by sellers at the point of sale.

Proportional

Relating to a relationship or ratio between two quantities where they increase or decrease at the same rate.

Progressive Tax System

A taxation system in which the tax rate increases as the taxable amount increases, leading to higher earners paying a larger percentage of their income in taxes than lower earners.

Government Expenditures

The total amount of money spent by the government on various services and projects, including healthcare, education, and infrastructure.