Asked by Brookelyn Pfleging on Jul 22, 2024
Verified
Cash dividends
A) increase expenses
B) decrease expenses
C) increase cash
D) decrease stockholders' equity
Cash Dividends
Cash distributions made to shareholders by a company out of its earnings.
Stockholders' Equity
Stockholders' Equity refers to the residual interest in the assets of a corporation after deducting liabilities, represented by capital stock, retained earnings, and possibly other components.
Increase Expenses
Refers to the rise in costs or expenditures that a company may experience as part of its operations.
- Understand the concepts of revenue, expenses, and equity in accounting.
Verified Answer
VS
Victoria ShremJul 24, 2024
Final Answer :
D
Explanation :
Cash dividends are payments made to stockholders from the company's earnings or reserves. These payments reduce the company's retained earnings, which is a component of stockholders' equity. Therefore, paying cash dividends will decrease the stockholders' equity of the company.
Learning Objectives
- Understand the concepts of revenue, expenses, and equity in accounting.