Question

Question 7
A company declared $500,000 of dividends that will be paid two months from now.

Which of the following items would be increased by this dividend declaration transaction? (check all that apply)


Retained Earnings



Cash from Financing



Net Income



Total Liabilities



Dividend Expenses


1 point
8.
Question 8
A company paid $50,00

Answer 1

For Question 7, when a company declares dividends, the following effects occur:

1. **Retained Earnings**: Decrease (because dividends are paid out of retained earnings).
2. **Cash from Financing**: No increase at declaration (cash is affected when the dividends are actually paid).
3. **Net Income**: No effect; dividends are not an expense, but rather a distribution of profits.
4. **Total Liabilities**: Increase (because the company now has an obligation to pay dividends).
5. **Dividend Expenses**: Not applicable (dividends are not classified as an expense).

Based on this analysis, the only item that would be increased by the dividend declaration is:

- **Total Liabilities**

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For Question 8, if you provide the complete question, I'd be happy to help answer it!