Recording the Payment (As Distinguished from the Declaration)of a Cash

question 121

Multiple Choice

Recording the payment (as distinguished from the declaration) of a cash dividend whose declaration was already recorded will:

• A) increase both the current ratio and working capital.
• B) have no effect on the current ratio or earnings per share.
• C) increase the current ratio but have no effect on working capital.
• D) decrease both the current ratio and working capital.
• E) None of these choices are correct.

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Definitions:

Materialism

a philosophical position that holds physical matter as the only or fundamental reality and discounts any independent existence of mental states or consciousness.

Idealism

A philosophy that emphasizes the primacy of ideas and ideals in interpreting experience and guiding actions, often contrasted with materialism.

Scorched Earth Policy

A military strategy that involves destroying anything that might be useful to the enemy while advancing through or withdrawing from an area.