Which of the Following Is True of Dividends

question 57

Multiple Choice

Which of the following is true of dividends?

• A)Dividends are a distribution of cash,stock,or other property to stockholders.
• B)Dividends increase assets and decrease total stockholders' equity of a corporation.
• C)Dividend payments decrease paid-in capital.
• D)Dividend payments increase stockholders' equity.

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Definitions:

Land Account

A type of asset account on the balance sheet representing the cost of land owned by a company.

Accounts Payable

Liabilities of a business that are due to be paid to creditors within a short period of time, typically one year.

Supplies Expense

This refers to the cost recorded for supplies used during an accounting period, not necessarily when they were purchased.

Operating Income

Income generated from normal business operations, calculated by subtracting operating expenses from the gross profit.