Which One of the Following Statements Related to Common Stock

question 86

Multiple Choice

Which one of the following statements related to common stock is correct?

• A)Corporations are required to pay annual dividends to their common stockholders.
• B)Corporations have the right to discontinue paying dividends.
• C)Corporations pay dividends at the discretion of the firm's president.
• D)Common stock is a form of corporate debt.
• E)Common stock has a pre-defined liquidation value.

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Definitions:

Increases and Decreases

Terms used to describe the upward and downward movements in financial and non-financial metrics within business operations.

T Account

The simplest form of an account.

Debit

An accounting entry that represents an increase in assets or expenses, or a decrease in liabilities, equity, or revenue.

Credit

An accounting entry that either decreases assets or increases liabilities and equity on a company's balance sheet, depending on the transaction.