Which of the Following Transactions Will Decrease a Corporation's Retained

question 102

Multiple Choice

Which of the following transactions will decrease a corporation's retained earnings?

• A) The corporation declares and pays a $2 per share cash dividend.
• B) The company completes a 2 for 1 stock split.
• C) The company pays a 20% stock dividend.
• D) Both A and C

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Definitions:

EBIT

Stands for Earnings Before Interest and Taxes, a financial metric that calculates a company's profitability from its core operations, excluding the effects of financing and tax environments.

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Packing Machines

Equipment used in various industries for the purpose of packaging products into containers, bags, or other formats for distribution.

Operating Cost

Expenses associated with the day-to-day functions of a business, including costs for goods, services, and administration.