Which of the Following Is Not True Regarding Restrictions on Dividend

question 58

Multiple Choice

Which of the following is not true regarding restrictions on dividend payments?

• A)These restrictions typically arise when loan agreements prohibit the registrant from paying cash dividends without the consent of the lender.
• B)In certain cases,restrictions at a subsidiary-company level exist such that the registrant's subsidiary companies may not transfer amounts to the registrant without the consent of a third party.
• C)Amounts subject to restrictions must be disclosed.
• D)The auditor will typically confirm with shareholders whether there are any side agreements regarding dividend restrictions.

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Definitions:

Personal Matter

An issue or situation that pertains exclusively to an individual's private life, often unrelated to their professional responsibilities.

Government Scrutiny

The investigation or close examination by governmental bodies into the practices, activities, and policies of individuals, organizations, or industries.

On-line Pharmacy

A platform that allows customers to order and purchase medications and health-related products over the internet.

Issues Management

The proactive process of identifying, evaluating, and dealing with issues that affect an organization, potentially becoming public controversies.