Asked by Erick Varela on May 07, 2024
Verified
Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue.
Dividends
Payments made by a corporation to its shareholder members from its profits.
Stockholders' Equity
The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of the stockholders.
Income Statement
A financial statement that shows a company’s revenue and expenses over a specific period, determining its profit or loss.
- Understand the characteristics and ordinary balances associated with types of accounts including assets, liabilities, equity, revenue, and expenses.
- Recognize the impact of transactions on stockholders' equity.
Verified Answer
EA
Eiman AlshamMay 11, 2024
Final Answer :
False
Explanation :
Dividends decrease stockholders' equity but are not listed on the income statement; they are recorded directly against retained earnings in the equity section of the balance sheet.
Learning Objectives
- Understand the characteristics and ordinary balances associated with types of accounts including assets, liabilities, equity, revenue, and expenses.
- Recognize the impact of transactions on stockholders' equity.