A paid dividends does what?
a)decrease assets and stockholders' equity
b)increase assets and stockholders' equity
c)increase assets and decrease stockholders' equity
d)decrease assets and increase stockholders' equity
Please help:confused:
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A paid dividends does what?
a)decrease assets and stockholders' equity
b)increase assets and stockholders' equity
c)increase assets and decrease stockholders' equity
d)decrease assets and increase stockholders' equity
Please help:confused:
I think answer is A.
When you paid dividents you decrease asset (Cash - Credit) and decrease stockholders' equity (Divitents - Debit).
Actually, dividents are declared on one day and paid on a later date.
So you will have two transactions:
1. Dividents - Debit (Stockholders' Equity)
Dividents Payable - Credit (Liability)
2. Dividents Payable - Debit (Liability)
Cash - Credit (Asset)
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