Payments made by a firm to its owners from sources other than current or accumulated earnings are called:

Question

Quizplus · Accepted Answer

Dividends are payments made to owners from current or accumulated earnings. Share repurchases are when a company buys back its own shares. Payments-in-kind are non-cash payments, such as giving shareholders more company products instead of cash. Stock splits are when shares are divided to increase the number of outstanding shares, but this does not involve any payments to owners. Thus, the correct answer is B, distributions, which refers to payments made to owners from sources other than earnings, such as from the sale of assets or investments.

Payments Made by a Firm to Its Owners from Sources