Which of the Following Occurs When a Cash Dividend Is

question 134

Multiple Choice

Which of the following occurs when a cash dividend is declared?

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

---

Definitions:

Principal

In law, the person who authorizes an agent to act on their behalf; in finance, the original amount of money invested or loaned.

Vicarious Liability

The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for damages caused by its employees.

Principal-Employer

The party in a contractual relationship who has the right to control the work of the employee or agent and is responsible for their actions.

Agent-Employee

An individual who performs tasks on behalf of another, the principal, in an employment context, with both agency and employment law aspects governing the relationship.