When cash dividends are declared,________ decrease(s)and ________ increase(s).
A) retained earnings; cash
B) cash; retained earnings
C) retained earnings; liabilities
D) cash; liabilities

Question

Quizplus · Accepted Answer

When cash dividends are declared, retained earnings decrease because the declaration of dividends reduces the amount of earnings retained within the company. Liabilities increase because the declaration of dividends creates a liability for the company to pay the declared amount to shareholders.

When Cash Dividends Are Declared,________ Decrease(s)and ________ Increase(s)

When Cash Dividends Are Declared, Decrease(s)and Increase(s)