Moore Industries
Moore Industries began operations on January 2, 2017, with an investment of $50,000 by each of its two stockholders. Net income for its first year of business was $240,000. Moore Industries paid a total of $100,000 in dividends to its stockholders during the year.

-Read the information about Moore Industries.The company's dividends for the year
A)reduce the amount of capital stock reported by the company.
B)are part of Moore Industries' operating costs.
C)are reported on the statement of retained earnings.
D)are an expense of Moore Industries.

Question

Moore Industries
Moore Industries began operations on January 2, 2017, with an investment of $50,000 by each of its two stockholders. Net income for its first year of business was $240,000. Moore Industries paid a total of $100,000 in dividends to its stockholders during the year.

-Read the information about Moore Industries.The company's dividends for the year
A)reduce the amount of capital stock reported by the company.
B)are part of Moore Industries' operating costs.
C)are reported on the statement of retained earnings.
D)are an expense of Moore Industries.

Quizplus · Accepted Answer

Dividends are distributions of the company's earnings to its shareholders. They are not expenses or operating costs and do not affect the amount of capital stock reported by the company. Instead, dividends are reported on the statement of retained earnings, which shows changes in the company's earnings that are not paid out as dividends.

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