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lbvjy [14]
2 years ago
13

What are the effects on the accounting equation when dividends are declared and paid?

Business
1 answer:
alexandr1967 [171]2 years ago
3 0

When dividends are declared and paid, retained earnings and cash are both decreased.

Paying dividends reduces cash flow while increasing dividends. A decline in retained earnings will occur when the temporary account of dividends, which will be closed at the end of the time period (such as a year), is closed.

How Do Retained Earnings Work?

After deducting dividend payments, a company's cumulative net earnings or profits are known as retained earnings. The term "retained," which is significant in accounting, captures the fact that the corporation kept such earnings rather than paying them as dividends to shareholders.

For this reason, retained earnings increase when new profits are made and drop when a corporation either makes a profit or pays dividends.

To know more about retained earnings

brainly.com/question/25998979

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You might be interested in
Question 9
irina1246 [14]

Answer:

Easy access to funds through a debit card

Explanation:

A checking account is an account that individuals open at a bank or a financial institution to withdraw and deposit money.  It is also referred to as a demand account.  The salient feature with a checking account is that it is very liquid.  It permits users a quick way of accessing their money.

A checking account can be accessed using  ATMs, electronic cards, and checks. The checking account allows users to deposit and withdraw money multiple times without attracting charges.

8 0
3 years ago
Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of co
Scilla [17]

Answer:

Option (d) 7 times

Explanation:

Data provided in the question:

Net income = $250,000

Dividends paid to common stockholders = $50,000

Common stock outstanding = 50,000

Selling price of the common stocks = $35

Now,

The price-earnings ratio is calculated as:

⇒ ( Stock price ) ÷ ( Earnings per share )

also,

Earnings per share = ( Net income ) ÷ ( common stock outstanding )

= $250,000 ÷ 50,000

= $5

or

Price-earnings ratio = $35 ÷ $5

or

Price-earnings ratio = 7 times

Option (d) 7 times

4 0
3 years ago
In her role as Human Resource​ Manager, Joan often is consulted on matters of employee discipline. At​ times, Joan makes strong
VladimirAG [237]

Answer:

Staff authority.

Explanation:

In this case, Joan is exhibiting the type of staff authority.

This type of authority occurs when consulting with other line managers, providing them with ideas and advice, as seen in the question in the excerpt that says,<em> "Sometimes Joan makes strong suggestions about how other managers should deal with problems of your employees ". </em>

Therefore, despite providing advice, it is necessary that the suggestions and ideas are approved by the superiors of each manager so that it can be implemented.

6 0
4 years ago
some countries' governments do not put any limits on the purchase of foreign currency for residents and nonresidents. these coun
max2010maxim [7]

Some countries' governments do not put any limits on the purchase of foreign currency for residents and nonresidents. these countries have a freely convertible currency.

Currency is the unit of price of money that is agreed upon by the government and its people in a country. A country has its own currency, although there are several countries that have the same type of currency. For example, in Indonesia, the currency is Rupiah, while in Japan the currency is Yen. Meanwhile, countries that use the same currency include America, Ecuador, Cambodia, Panama, and the British Indian Ocean Region.

In addition, currency can also be defined as a medium of exchange for goods and services. The party or institution that has the absolute right to issue currency is the government and its central bank.

You can learn more about Currency here brainly.com/question/14372075

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4 0
1 year ago
what is a graphical representation of the combination of goods and services that can be produced in a situation
Komok [63]

Answer: Production possibility frontier (PPF).


Explanation: PPF is curve on a graph which depicts the situation which you have asked in a question. For your ease i will upload a picture of that curve so that you can understand the answer better. For better understanding the graph below uses the example of Cotton as a good.

3 0
3 years ago
Read 2 more answers
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