The Cumulative Effect of the Declaration and Payment of a Cash

question 341

Multiple Choice

The cumulative effect of the declaration and payment of a cash dividend on a company's statement of financial position is to

• A) decrease current liabilities and equity.
• B) increase total assets and equity.
• C) increase current liabilities and equity.
• D) decrease equity and total assets.

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Definitions:

Articles Of Confederation

First frame of government for the United States; in effect from 1781 to 1788, it provided for a weak central authority and was soon replaced by the Constitution.

Indebted Farmer

An agricultural worker or landowner who owes money, typically as a result of borrowing to finance farming operations or land purchase.

Revolutionary War

A war fought from 1775 to 1783 in which the American colonies successfully gained independence from Great Britain, becoming the United States of America.