The Declaration and Payment of a Cash Dividend

question 88

Multiple Choice

The declaration and payment of a cash dividend

• A)reduces retained earnings and increases liabilities by the amount of the dividend.
• B)reduces retained earnings and increases contributed capital by the same amount.
• C)reduces assets and increases liabilities by the amount of the dividend.
• D)reduces both assets and retained earnings by the amount of the dividend.

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Definitions:

Claim

A statement or assertion that something is the case, typically without providing evidence or proof.

Reason

The power of the mind to think, understand, and form judgments logically.

Chosen Alternative

The option selected among several possibilities in a decision-making process, often considered the most suitable or preferred.

Counterargument

A collection of reasons or an assertion presented to counter an idea or theory proposed in a different argument.