The declaration of a cash dividend by the board of directors causes a decrease in a corporation's retained earnings and a decrease in its assets.

Name: The declaration of a cash dividend by the board of directors causes a decrease in a corporation's retained earnings and a decrease in its assets.
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Question

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The declaration of a cash dividend decreases retained earnings, but it does not immediately decrease assets until the dividend is actually paid.

The Declaration of a Cash Dividend by the Board of Directors