The Declaration of Dividends

question 43

Multiple Choice

The declaration of dividends

• A)increases with a credit.
• B)decreases retained earnings.
• C)is necessary for proprietorships.
• D)is an expense account on the income statement.

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Definitions:

Cash Break-even Point

The cash break-even point is the level of output or sales at which a business generates enough revenue to cover its operating cash expenses, without necessarily making a profit.

Variable Cost

Outlays that rise and fall with the quantity of production or sales activities, encompassing costs such as materials and labor.

Fixed Costs

Costs that do not change with the level of production or business activity, such as rent, salaries, and loan payments.

Estimated Sales Price

The anticipated amount for which a product or asset would sell in the current market.