Lewis Corporation Reported the Following Information for the Year Ended

question 55

Multiple Choice

Lewis Corporation reported the following information for the year ended December 31,2017:
$\begin{array}{lr}\text { Net income } & \$ 10,000 \\\text { Dividends } & 6,000 \\\text { Retained eamings at December } 31,2017 & 25,000\end{array}$
What was the economic effect of the payment of Lewis's dividends?

• A)The dividends reduced net income for 2017.
• B)The dividends should be equal to net income if the company's accounting equation is in balance.
• C)The dividends reduced total retained earnings for the year.
• D)The dividends must be paid whenever Lewis Corporation reports net income.

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Definitions:

European Diseases

Infectious diseases brought to the Americas by European explorers and colonists that had devastating impacts on the indigenous populations, due to lack of prior exposure and immunity.

Continental Isolation

The concept of a country, specifically the United States, being separated and insulated from the direct conflicts and politics of other continents, particularly Europe, due to geographical distance.

Native Americans

The indigenous peoples of the United States, including American Indians and Alaska Natives, with distinct cultures, languages, and histories.

Above-ground

Pertains to structures, systems, or cables located on or above the surface of the earth, as opposed to being buried underground.