The declaration and payment of a dividend by a corporation causes:
A) A decrease in assets and a decrease in liabilities.
B) A decrease in assets and a decrease in retained earnings
C) A decrease in assets and a decrease in common stock
D) A decrease in assets and an increase in retained earnings
E) None of the above

Question

Quizplus · Accepted Answer

When a corporation declares and pays a dividend, it results in a decrease in assets (typically cash) and a decrease in retained earnings, reflecting the distribution of profits to shareholders.

The Declaration and Payment of a Dividend by a Corporation