XYZ CoPaid $1,000 in Dividends to Stockholders

question 75

Multiple Choice

XYZ Co.paid $1,000 in dividends to stockholders.How does this transaction affect the accounts of XYZ?

• A) Cash will decrease by $1,000 and retained earnings will decrease by $1,000.
• B) Cash will decrease by $1,000 and expenses will increase $1,000.
• C) Cash will decrease by $1,000 and revenues will decrease $1,000.
• D) Net income will decrease by $1,000.