An Increase in the Dividends Declared Account Will Result in

question 37

Multiple Choice

An increase in the Dividends Declared account will result in

• A) an increase in the Retained Earnings account.
• B) an increase in expenses.
• C) a decrease in the Retained Earnings account.
• D) a decrease in expenses.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money, or, for corporations, the price paid for the use of borrowed capital.

Contingent Liability

A potential financial obligation that may arise in the future depending on the outcome of an uncertain event or situation.

Probable Loss

A loss in financial terms that is likely to occur based on current information and judgment.

Reasonably Possible

A term used in accounting to describe a condition that could occur, affecting financial decisions or disclosures, based on current knowledge and events.