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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
You're a partner at O'Leary, Ford, and Bradley Legal Services, and one of your responsibilities is to get new business for your
elixir [45]

Answer:

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Explanation:

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3 years ago
Why is knowledge of the key success factors in an industry important?
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3 years ago
SHAPE magazine is targeted at young women seeking healthier lifestyles. At a price of $3 per copy, 1.25 million copies are sold.
Lerok [7]

Answer:

A. $ 3,750,000

Explanation:

Given that

At lower price

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3 years ago
Margin of Safety Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $4
valina [46]

Answer:

Margin of safety - Units =3350

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Explanation:

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<u>Margin of safety - Units</u>

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3 0
3 years ago
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