Dividends are an expense of a corporation and reduce both total assets and liabilities.

Name: Dividends are an expense of a corporation and reduce both total assets and liabilities.
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Question

Quizplus · Accepted Answer

Dividends are not an expense of a corporation, but rather a distribution of profits to shareholders after all expenses and taxes have been paid. Dividends do not reduce total assets or liabilities; instead, they decrease retained earnings on the balance sheet.

Dividends Are an Expense of a Corporation and Reduce Both