Select those statements below that are true about cash dividends. (Check all that apply.)Multiple select question.On the date of record, Retained Earnings is decreased.On the payment date, Retained Earnings is decreased.On the payment date, current assets are decreased.On the declaration date, liabilities are increased.
Question
Select those statements below that are true about cash dividends. (Check all that apply.)Multiple select question.On the date of record, Retained Earnings is decreased.On the payment date, Retained Earnings is decreased.On the payment date, current assets are decreased.On the declaration date, liabilities are increased.
Solution
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On the date of record, Retained Earnings is decreased. - False. The date of record only identifies who will receive the dividends, it does not affect the accounting records.
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On the payment date, Retained Earnings is decreased. - False. Retained earnings are decreased on the declaration date, not the payment date.
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On the payment date, current assets are decreased. - True. When the cash dividend is paid, the company's cash (a current asset) decreases.
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On the declaration date, liabilities are increased. - True. When the board of directors declares a dividend, a liability is created and must be recorded in the company's financial statements.
Similar Questions
Indicate the respective effects of the declaration of a cash dividend on the following sections of the statement of financial position: Group of answer choices Increase Total Assets; Decrease Total Liabilities; No change in Total Equity No change in Total Assets; Increase Total Liabilities; Decrease Total Equity Decrease Total Assets; No change in Total Liabilities; Increase Total Equity Decrease Total Assets; Increase Total Liabilities; Decrease Total Equity
If retained earnings increases from the beginning of the year to the end of the year, then: a. profit is greater than dividends paid. b. additional investments are greater than profit. c. dividends paid are greater than profit. d. additional investments are less than losses.
The declaration and payment of a cash dividend ultimately causes a(n) ______. (Check all that apply.)Multiple select question.increase in Treasury Stockdecrease in Treasury Stockdecrease in Retained Earningsdecrease in Cashdecrease in stockholders' equity
A cash dividend payment to shareholders during the year should be reported on the statement of cash flows as:Multiple ChoiceA decrease in cash flows from operating activities.An increase in cash flows from financing activities.A decrease in cash flows from financing activities.A decrease in cash flows from investing activities.An increase in cash flows from investing activities.
32.Which financial statement shows the changes in a company's cash position? A. Cash flow statement B. Balance sheet C. Income statement D. Statement of retained earnings
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