Which of the Following Is Most Likely to Be Found

question 7

Multiple Choice

Which of the following is most likely to be found in state laws regarding payment of dividends?

• A) Dividends may be paid from legal capital.
• B) Retained earnings are available for dividends unless restricted by contract or by statute.
• C) Unrealized capital is available for any type of dividend.
• D) Capital from donated assets is available for dividends.

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Definitions:

Deferred Tax

A tax liability or asset that arises due to the temporary differences between the accounting income and the taxable income.

Goodwill

The value attributed to a company's brand name, customer relationships, and other intangible assets that are not separately identifiable.

Liabilities

are present financial obligations arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits.

Tax Rate

The percentage at which an individual or corporation is taxed.