Jiminez Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event affects the company's financial statements?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Jiminez Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event affects the company's financial statements? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Paying cash dividends decreases assets (cash) and decreases equity (retained earnings) on the balance sheet. It does not affect the income statement, but is reported as a cash outflow for financing activities on the statement of cash flows.

Jiminez Company Paid a $300 Cash Dividend