Bennoit Corporation paid dividends totaling €295,000 to its shareholders. This transaction will decrease assets and

Question

Quizplus · Accepted Answer

Paying dividends results in a decrease in retained earnings (a part of equity), which decreases overall equity by the amount of the dividends paid. This is a decrease in the accounting equation, as assets are decreasing while equity is decreasing. Therefore, option A is the correct answer.

Bennoit Corporation Paid Dividends Totaling €295,000 to Its Shareholders