Cash Paid to Stockholders by the Business of a Corporation

question 137

True/False

Cash paid to stockholders by the business of a corporation and used for personal expenses, should be treated as an expense of the business.

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Definitions:

Accounting Issues

Challenges or problems encountered in the preparation, auditing, or analysis of financial statements.

Notes Receivable

A financial asset representing amounts owed to the company by others, documented by formal agreements with repayment dates and interest.

Accounts Receivable

Liabilities of customers towards a business for availing themselves of or receiving products or services not yet paid for.

Promissory Note

A promissory note is a financial instrument in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand.