Perez Company paid a $300 cash dividend.Which of the following accurately reflects how this event affects the company's horizontal financial statements model?

Question

Quizplus · Accepted Answer

Paying cash dividends decreases assets (cash) and decreases stockholders' equity (retained earnings) on the balance sheet. It does not affect the income statement, but is reported as a cash outflow for financing activities on the statement of cash flows.

Perez Company Paid a $300 Cash Dividend