Which of the Following Is Not True Regarding Restrictions on Dividend

question 58

Multiple Choice

Which of the following is not true regarding restrictions on dividend payments?

• A)These restrictions typically arise when loan agreements prohibit the registrant from paying cash dividends without the consent of the lender.
• B)In certain cases,restrictions at a subsidiary-company level exist such that the registrant's subsidiary companies may not transfer amounts to the registrant without the consent of a third party.
• C)Amounts subject to restrictions must be disclosed.
• D)The auditor will typically confirm with shareholders whether there are any side agreements regarding dividend restrictions.

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Definitions:

Gricean Maxim

Principles proposed by philosopher H.P. Grice to ensure clear, cooperative communication, including quality, quantity, relation, and manner.

Quantity

Quantity refers to an amount or number of a material or immaterial thing not requiring a unit of measure.

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