In a Study Session, a Classmate Makes This Statement "Dividends

question 49

Multiple Choice

In a study session, a classmate makes this statement "Dividends are listed as expenses on the income statement." What is your best response to this statement?

• A)I've been struggling with that concept and I feel that dividends should be shown on the balance sheet as assets.
• B)You are right.Revenues and expenses are shown on the income statement.Dividends are a cost of generating revenues and that makes them an expense.Why else would a corporation pay dividends?
• C)Dividends represent a portion of corporate profits paid to the shareholders.They belong on the retained earnings statement.
• D)Dividends are deducted from retained earnings on the balance sheet.

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Definitions:

Observing Participants

A research method that involves actively watching and sometimes interacting with participants in their natural settings to gather qualitative data.

Conducting Interviews

Conducting interviews involves systematically asking questions to gather information from participants, a qualitative research method used to understand experiences, opinions, or behaviors.

Precede

To come before something else in time, order, or position.