Which of the Following Changes Describes the Payment of $1,000

question 72

Multiple Choice

Which of the following changes describes the payment of $1,000 for cash dividends?

• A) Assets and shareholders' equity increase by $1,000.
• B) Assets and shareholders' equity decrease by $1,000.
• C) Assets and liabilities increase by $1,000.
• D) Assets and liabilities do not change.

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Definitions:

Carrying Amount

The value of an asset or liability as reported on the balance sheet, reflecting its original cost minus any depreciation, amortization, or impairment charges.

Pre-Acquisition Equity

The equity interest in a company existing prior to its acquisition by another entity, used to determine the acquisition date fair value of the investee.

Dividend Declared

The official announcement by a company's board of directors that a dividend will be paid to shareholders, specifying the amount and payment date.

Goodwill

The intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, reflecting factors like reputation, brand, and customer relationships.