Which of the following statements is CORRECT?
A) Dividends paid reduce the net income that is reported on a company's income statement.
B) If a company uses some of its bank deposits to buy short-term,highly liquid marketable securities,its current assets as shown on the balance sheet will decline.
C) If a company issues new long-term bonds to purchase fixed assets during the current year,its reported current assets and current liabilities at the end of the year will increase.
D) Accounts receivable are reported as a current liability on the balance sheet.
E) If a company pays more in dividends than it generates in net income,its retained earnings as reported on the balance sheet will decline from the previous year's balance.

Question

Quizplus · Accepted Answer

If a company pays more in dividends than it generates in net income, its retained earnings will decrease. Retained earnings are part of equity and are reported on the balance sheet.

Which of the Following Statements Is CORRECT