Owners of Tri-States Industries, Ralph and Maureen, Are Sent a Dividend

question 64

Multiple Choice

Owners of Tri-States Industries, Ralph and Maureen, are sent a dividend check from the company.For this transaction, what is the effect on the accounting equation for Tri-States Industries?

• A) Assets decrease and stockholders' equity decreases.
• B) Assets increase and stockholders' equity increases..
• C) Liabilities increase and stockholders' equity decreases.
• D) Liabilities increase and stockholders' equity decreases

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Definitions:

Work Inputs

The effort, materials, and resources put into a process or system to achieve an output or result.

Present Discounted Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Expected Profits

Projected earnings calculated by estimating revenues and subtracting anticipated costs and expenses.

Interest Rates

The cost of borrowing money or the return on savings, typically expressed as a percentage.