A company declared a cash dividend on its common stock in December 2010, payable in January 2011. Retained Earnings would
A) increase on the date of declaration.
B) not be affected on the date of declaration.
C) not be affected on the date of payment.
D) decrease on the date of payment.

Question

Quizplus · Accepted Answer

Retained Earnings decrease on the date of declaration, not on the date of payment.

A Company Declared a Cash Dividend on Its Common Stock