Payments of cash by a corporation to its shareholders are called
A)Dividends.
B)Shareholders equity.
C)Withdrawals.
D)Cheques.
E)Expenses.

Question

Quizplus · Accepted Answer

Dividends are payments of cash made by a corporation to its shareholders as a distribution of the corporation's profits. Shareholders' equity represents the residual interest in the assets of the corporation after deducting its liabilities. Withdrawals are payments to owners in a sole proprietorship or partnership, not a corporation. Cheques are a means of making payments but not the name of the payment itself. Expenses are costs incurred by a corporation in earning revenue, not payments to shareholders.

Payments of Cash by a Corporation to Its Shareholders Are