Dividends ________.
A)are the distribution of profits
B)are expenses and cause shareholders' equity to decrease
C)cause retained earnings to increase
D)cause common stock to decrease

Question

Quizplus · Accepted Answer

Dividends are the distribution of profits to shareholders. They are not expenses and do not cause shareholders' equity or common stock to decrease. However, they do cause retained earnings to decrease, as they are a distribution of profits that are no longer being retained by the company.