Which of the Following Occurs When a Previously Declared Dividend

question 36

Multiple Choice

Which of the following occurs when a previously declared dividend is paid?

• A)Assets increase.
• B)Stockholders' equity increases.
• C)Liabilities decrease.
• D)Assets remain unchanged.

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Definitions:

Default

Failure to fulfill a financial obligation, especially failing to make payments on a loan, bond, or other debt instrument.

Nonfinancial Businesses

Companies primarily engaged in activities other than financial services, such as manufacturing, services, or retail.

Marketable Securities

Financial instruments that can be easily converted into cash, such as stocks, bonds, and Treasury bills.

Liabilities

Financial obligations or debts owed by a company or an individual to others, which must be settled over time by transferring economic benefits.