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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

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3 years ago
Alice earned $12 per hour. What equation shows the relationship between her
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<em><u>The equation shows the relationship between her  weekly salary (w), hours per week (h), and rate per hour (r) is:</u></em>

w = h \times r

<em><u>Solution:</u></em>

Given that,

Alice earned $12 per hour

1 hour = $ 12

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1 day = 24 hours

1 week = 7 days

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1 week = 7 x 24 = 168 hours

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let "r" be the rate per hour

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