Which of the following transactions decreases retained earnings?
A) A property dividend.
B) A stock dividend.
C) A cash dividend.
D) All of these answer choices are correct.

Question

Quizplus · Accepted Answer

All of these transactions decrease retained earnings. A property dividend involves distributing assets other than cash (e.g., inventory or investments) to shareholders, which reduces retained earnings. A stock dividend distributes additional shares to shareholders, which transfers a portion of retained earnings to common stock. A cash dividend is a direct payment to shareholders from current or retained earnings, also reducing retained earnings.

Which of the Following Transactions Decreases Retained Earnings