A Dividend Is Usually a Cash Distribution From

question 35

Multiple Choice

A dividend is usually a cash distribution from:

• A) current earnings or accumulated retained earnings.
• B) the capital surplus account.
• C) common stock account.
• D) liquidated capital.

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Definitions:

Sight Draft

A financial instrument that is payable on demand when presented to the drawee.

Net Present Value

is a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Credit Sale

A transaction where the buyer is allowed to pay for goods or services at a later date, as opposed to paying at the time of sale.

Monthly Interest Rate

The interest rate applied to a loan or investment, calculated to reflect the monthly compounding period.