Lewis Corporation Reported the Following Information for the Year Ended

question 169

Multiple Choice

Lewis Corporation reported the following information for the year ended December 31, 2016: $\begin{array}{lr}\text { Net income } & \$ 10,000 \\\text { Dividends } & 6,000 \\\text { Retained earnings at December } 31,2016 & 25,000\end{array}$ ? What was the economic effect of the payment of Lewis' dividends?

• A) The dividend reduced net income for 2016.
• B) The dividend should be equal to net income if the company's accounting equation is in balance.
• C) The dividends reduce total retained earnings for the year.
• D) The dividends must be paid whenever Raymond Corp.reports net income.

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Definitions:

Ego

In psychoanalytic theory, it represents the part of the personality that mediates between the demands of the id, superego, and reality.

Libido

A term used in psychoanalytic theory to describe the energy created by the survival and sexual instincts.

Psychodynamic

A psychological perspective that emphasizes the influence of the unconscious mind on behavior and feelings.

Psychological Energy

A concept referring to the mental or emotional strength and vitality that drives individual motivation and behavior.