Which of the Following Is Usually NOT a Prerequisite to Paying

question 40

Multiple Choice

Which of the following is usually NOT a prerequisite to paying a cash dividend?

• A)Formal action by the board of directors
• B)Market value in excess of par value per share
• C)Sufficient cash
• D)Sufficient retained earnings

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Definitions:

Asset Account

An account on a balance sheet that represents the value of all assets owned by an entity.

Account Balance

The amount of money present in a financial account at any moment, which can reflect credits, debits, and pending transactions.

Debit Side

The debit side refers to the left side of an accounting ledger where debits are recorded, often signifying an increase in assets or expense accounts, or a decrease in liability, equity, or revenue accounts.