The board of directors of Chandler Company declared a cash dividend.Which of the following choices accurately reflects how this event would affect the elements of the company's financial statements?

Question

Quizplus · Accepted Answer

The increase in liabilities (dividends payable)is accompanied by a decrease in stockholders' equity (retained earnings).Since cash has not yet been paid to the stockholders,there is no effect on the statement of cash flows.

The Board of Directors of Chandler Company Declared a Cash