Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:

Question

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The declaration of a cash dividend will decrease the retained earnings section of the stockholders' equity portion of the balance sheet (Choice B), as dividends are a distribution of profits to shareholders. The other sections of the balance sheet such as assets, liabilities, and contributed capital are not directly affected by the declaration of a cash dividend.

Indicate the Respective Effects of the Declaration of a Cash