Asked by Scott Johnston on May 03, 2024
Verified
When the board of directors declares a cash or stock dividend, this action decreases retained earnings.
Cash Dividend
A distribution of profits by a corporation to its shareholders in the form of cash.
Stock Dividend
A dividend payment made to shareholders in the form of additional shares of stock, rather than cash.
Retained Earnings
Profit that remains after dividends are paid, which is reinvested in the company or used to pay off debt.
- Comprehend the statutes and limitations relevant to cash and stock dividends.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
True
Explanation :
When a dividend is declared, the company's assets are being distributed to shareholders. This decreases the amount of money the company has retained (aka retained earnings).
Learning Objectives
- Comprehend the statutes and limitations relevant to cash and stock dividends.