Jiminez Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event affects the company's financial statements? $$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l| }
\hline \text { Assets } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } & \text { Cash Flow } \
\hline
\end{array}$$

Question

Jiminez Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event affects the company's financial statements? $$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l| } 
\hline \text { Assets } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } & \text { Cash Flow } \
\hline
\end{array}$$

Quizplus · Accepted Answer

Paying a cash dividend decreases assets (cash) and equity (retained earnings) by $300. It does not affect liabilities, revenue, expenses, or net income. The cash flow is classified as a financing activity (FA).

Jiminez Company Paid a $300 Cash Dividend A) NA =300+300 NA −300=300 NA \begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}\text { NA } & =& 300 & +&300 & \text { NA } & - & 300 & =&300 & \text { NA } \\\hline\end{array} NA ​=​300​+​300​ NA ​−​300​=​300​ NA ​​

Jiminez Company Paid a $300 Cash Dividend A) $\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}\text { NA } & =& 300 & +&300 & \text { NA } & - & 300 & =&300 & \text { NA } \\\hline\end{array}$