Declaring and paying cash dividends affects which accounts?
A)Cash only
B)Capital stock only
C)Cash and retained earnings
D)Cash and capital stock

Question

Quizplus · Accepted Answer

When a company declares and pays cash dividends, it will decrease the cash account and the retained earnings account. Therefore, the correct answer is C, as it affects both the cash and retained earnings accounts.

Declaring and Paying Cash Dividends Affects Which Accounts