What Is a Dividend

question 1

Multiple Choice

What is a dividend?

• A) A distribution of earnings to shareholders
• B) Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service
• C) Refer to the costs incurred in operating and maintaining a business
• D) Anything owned that has value or earning power

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, often varying by income or profits.

Income Taxes Payable

The amount of income tax a company owes to the government but has not yet paid.

Book Income Before Income Tax

The income reported in financial statements before the effect of income taxes, reflecting the financial performance from core operation and non-operational activities.

Tax Depreciation

The method by which a business writes off the cost of a tangible asset over its useful life for tax purposes.