The Net Effects on a Corporation of the Declaration and Payment

question 31

Multiple Choice

The net effects on a corporation of the declaration and payment of a cash dividend are to

• A)increase assets and increase stockholders' equity.
• B)decrease liabilities and decrease stockholders' equity.
• C)decrease assets and decrease stockholders' equity.
• D)increase stockholders' equity and decrease liabilities.

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Definitions:

Circular Reasoning

Circular reasoning is a logical fallacy where the conclusion of an argument is assumed in one of the premises, offering no actual proof.

Alcoholic

A person who suffers from alcoholism, a chronic disease characterized by uncontrolled drinking and preoccupation with alcohol.

Inductive

A logical process in which multiple premises, all believed true or found true most of the time, are combined to obtain a specific conclusion.

Deductive

Deductive reasoning involves drawing specific conclusions from a general statement or principle, often used in logical argumentation and mathematical proofs.