Distribution of Dividends Represents Increases in Retained Earnings

question 102

True/False

Distribution of dividends represents increases in retained earnings.

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Definitions:

Dividend Revenue

Income received from owning shares in a company, typically paid out from the company's profits.

Investing Activities

Investing activities involve the purchase and sale of long-term assets and other investments, not including cash equivalents, as part of a company’s capital allocation strategy.

Short-term Investments

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business cycle, whichever is longer.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves.