Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 13 - No. 28)
What is the impact on the balance sheet from a company declaring a dividend?
Decrease in Retained Earnings
Decrease in Liabilities
Decrease in Assets
Increase in Share Capital
Explanation
A declared dividend reduces retained earnings (an equity item) and the cash position (an asset). A liability is created.
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