The Cumulative Effect of the Declaration and Payment of a Cash

question 75

Multiple Choice

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

• A) decrease both total liabilities and shareholders' equity.
• B) increase both total expenses and total liabilities.
• C) increase both total assets and shareholders' equity.
• D) decrease both total assets and shareholders' equity.

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Definitions:

Beneficiary

An individual or entity entitled to benefits or proceeds from a will, trust, insurance policy, or other contract.

Open Policies

Insurance policies that do not fix the value of the insured cargo but leave it to be ascertained in case of loss.

Fair Market Value

The price at which an asset would change hands between a willing buyer and seller, each having reasonable knowledge of relevant facts, and neither being under compulsion to buy or sell.

Material Facts

Facts that are significant or essential to the issue at hand, and that can influence a decision or outcome.