Dividends affect the business's net income or net loss and are recorded as an expense.

Name: Dividends affect the business's net income or net loss and are recorded as an expense.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Dividends are distributions of profits to shareholders and are not recorded as an expense. Instead, they are recorded as a reduction in retained earnings on the balance sheet. Dividends do not affect the net income or net loss of the business, as they are accounted for after those calculations have already been made.

Dividends Affect the Business's Net Income or Net Loss and Are