A Liquidating Dividend

question 52

Multiple Choice

A liquidating dividend:

• A)Occurs only when a company is going out of business.
• B)Occurs when a corporation pays a dividend that exceeds the balance in the retained earnings account.
• C)Is an expense to the corporation.
• D)Occurs only when the corporation has a loss for the year.

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Definitions:

High Value

Referring to items or services deemed of significant worth, usually due to their quality, utility, scarcity, or demand.

Low Value

Refers to items or services that are considered to be of lesser worth or importance, either monetarily or in terms of utility.

Expected Profit

An estimate of the potential earnings from an investment or business venture, incorporating the likelihood of different outcomes.

Customers

The individuals or businesses that purchase goods or services offered by companies or sellers.