An increase in the Dividends Declared account will result in
A)an increase in the Retained Earnings account.
B)an increase in expenses.
C)a decrease in the Retained Earnings account.
D)a decrease in expenses.

Question

Quizplus · Accepted Answer

An increase in the Dividends Declared account results in a decrease in the Retained Earnings account because dividends are paid out of retained earnings, reducing the amount of earnings retained in the business.

An Increase in the Dividends Declared Account Will Result in