QuestionJune 25, 2025

Current Attempt in Progress The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to increase total expenses and total liabilities. decrease total assets and stockholders' equity. decrease total liabilities and stockholders' equity. increase total assets and stockholders' equity.

Current Attempt in Progress The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to increase total expenses and total liabilities. decrease total assets and stockholders' equity. decrease total liabilities and stockholders' equity. increase total assets and stockholders' equity.
Current Attempt in Progress
The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to
increase total expenses and total liabilities.
decrease total assets and stockholders' equity.
decrease total liabilities and stockholders' equity.
increase total assets and stockholders' equity.

Solution
4.5(311 votes)

Answer

Decrease total assets and stockholders' equity. Explanation 1. Understand the Effect of Declaration Declaring a cash dividend creates a liability (Dividends Payable), increasing total liabilities. 2. Understand the Effect of Payment Paying the dividend decreases cash, reducing total assets. 3. Analyze Stockholders' Equity Impact Both declaration and payment reduce retained earnings, decreasing stockholders' equity.

Explanation

1. Understand the Effect of Declaration<br /> Declaring a cash dividend creates a liability (Dividends Payable), increasing total liabilities.<br /><br />2. Understand the Effect of Payment<br /> Paying the dividend decreases cash, reducing total assets.<br /><br />3. Analyze Stockholders' Equity Impact<br /> Both declaration and payment reduce retained earnings, decreasing stockholders' equity.
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