Hiring a New Employee Affects Both Sides of the Accounting

question 67

True/False

Hiring a new employee affects both sides of the accounting equation.

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Definitions:

Excess Cash

Refers to the amount of cash held by a company that exceeds the normal operational needs, often indicating a potential for investment, distribution to shareholders, or acquisition.

Dividend

A part of a company's profits distributed to its shareholders, usually four times a year.

Share Repurchase

A process where a company repurchases its own stock from the market, leading to a decrease in the total shares available publicly.

Homemade Dividend

A strategy where investors create their own dividend policy by selling a portion of their holdings in a stock rather than relying on the company's dividend payments.