If a Corporation Distributes Cash to Its Shareholders, Then

question 206

Multiple Choice

If a corporation distributes cash to its shareholders, then

• A) there has been a violation of accounting principles.
• B) equity will increase.
• C) equity will decrease.
• D) there will be a new liability showing the shareholders owe money to the business.

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Definitions:

Per Capita Income

This is the average income earned per person in a given area in a specified year.

Developing Nations

Countries that are in the process of industrialization and have lower per capita income levels compared to developed countries.

Annual Revenues

The total amount of income generated by a business or organization from its activities over the course of a year.

Wal-Mart

A multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.