Dividends paid to stockholders decrease assets and increase equity.

Dividends Paid

Payments made by a corporation to its shareholders, usually derived from the company's profits.

Assets

Economic resources or owned items of value, such as cash, property, equipment, that an individual, company, or country owns or controls with the expectation that it will provide future benefit.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation.

Gain an understanding of how stockholders' equity is influenced by transactional activities.
Differentiate between assets, liabilities, and stockholders' equity.

Verified Answer

Thaís DutraJun 13, 2024

Final Answer :

False

Explanation :

Dividends paid to stockholders decrease assets (specifically cash or equivalents) and also decrease equity because dividends are a distribution of earnings to shareholders, reducing the company's retained earnings.

Learning Objectives

Gain an understanding of how stockholders' equity is influenced by transactional activities.
Differentiate between assets, liabilities, and stockholders' equity.

Dividends paid to stockholders decrease assets and increase equity.

Definitions

Learning Objectives

Learning Objectives

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