When a corporation issues a dividend in excess of the balance of its retained earnings account,it is issuing a:

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A liquidating dividend is issued when a corporation wants to distribute its assets to shareholders in excess of its retained earnings account. This usually occurs when a corporation is going out of business or reducing its capital investments. A scrip dividend refers to a dividend paid in the form of promissory notes, while a stock dividend is issued when a corporation distributes its own shares to its shareholders. A property dividend is where a corporation distributes non-cash assets as its dividend payment.

When a Corporation Issues a Dividend in Excess of the Balance