Dividends always decrease equity.

Equity

The value of an owner’s interest in a property or a business, after deducting liabilities and debts.

Dividends

Dividends are a portion of a company's earnings distributed to shareholders, usually in the form of cash payments or additional shares, reflecting the company's profitability and investment return.

Understand how dividends are classified and treated within financial statements.

Verified Answer

Debra TrujilloMay 29, 2024

Final Answer :

True

Explanation :

Dividends are distributions of earnings to shareholders, reducing the corporation's retained earnings, which is a component of shareholders' equity.

Learning Objectives

Understand how dividends are classified and treated within financial statements.

Dividends always decrease equity.

Definitions

Learning Objectives

Learning Objectives

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