When a Company Pays a Dividend on Common Stock, It

question 38

Multiple Choice

When a company pays a dividend on common stock, it appears as

• A) an expense on the income statement.
• B) a reduction in the amount of retained earnings.
• C) a current liability on the balance sheet.
• D) dividend payments have no effect on the financial statements.

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Definitions:

Indirect Questions

Questions embedded within a statement or another question, often used to make inquiries less direct or more polite.

Standards

Set standards or criteria across different areas serving as a point of reference or adherence.

Grammar

The set of structural rules governing the composition of clauses, phrases, and words in any given natural language.

Antecedent

An antecedent is a thing or event that existed before or logically precedes another, often used in grammar to refer to the noun to which a pronoun refers.