A Company That Doesn't Make a Dividend Payment Is Insolvent

question 303

True/False

A company that doesn't make a dividend payment is insolvent and may be forced into bankruptcy by the stockholders.

---

Definitions:

Trial Balance

A financial report that lists all accounts and their balances at a specific point in time, ensuring that debits equal credits.

General Ledger Accounts

Individual accounts in the general ledger that record all transactions of a company, used to prepare financial statements.

Liquidity

The simplicity of turning an asset into cash without impacting its market value.

Long-Term Investments

Assets that a company intends to hold for more than one year, including stocks, bonds, real estate, and other financial investments.