A company declared and paid dividends of $1800. How does this transaction affect the accounting equation?
A)Add $1800 to Revenue and add $1800 to Cash.
B)Add $1800 to Dividends and add $1800 to Accounts Receivable.
C)Subtract $1800 from Retained Earnings and subtract $1800 from Cash.
D)Add $1800 to Dividend Expense and subtract $1800 from Cash.

Question

Quizplus · Accepted Answer

Dividends reduce retained earnings and paying them decreases cash.

A Company Declared and Paid Dividends of $1800