Which of the Following Occurs When a Dividend Is Declared

question 156

Multiple Choice

Which of the following occurs when a dividend is declared?

• A) Liabilities increase.
• B) Equity increases.
• C) Liabilities decrease.
• D) Assets increase.

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Definitions:

Sales On Account

Transactions where the buyer purchases goods or services on credit, with an agreement to pay at a later date.

Accounts Receivable

Funds that clients or customers are yet to pay to a company for products or services that have already been provided or utilized.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity.

Long-term Liabilities

Financial obligations of a business that are due more than one year in the future, such as bonds payable, long-term loans, and lease obligations.