Which of the following would result when a company pays a previously declared cash dividend?
A)Current liabilities are reduced and a financing cash flow is created.
B)Stockholders' equity is reduced and a financing cash flow is created.
C)Current assets are reduced and an investing cash flow is created.
D)Stockholders' equity is reduced and an investing cash flow is createD.Declaring a dividend creates a dividend payable.Paying the dividend reduces this current liability account.Paying dividends are classified as financing cash flows.

Question

Quizplus · Accepted Answer

When a company pays a previously declared cash dividend, current liabilities are reduced because the dividend payable is settled, and it is classified as a financing cash flow.

Which of the Following Would Result When a Company Pays