Question

a company is worse off by paying cash dividends because it must record a loss for...

a company is worse off by paying cash dividends because it must record a loss for this transaction in its income statement.

true or false?
Business   Accounting   
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Answer #1

False

Explanation:

Cash dividend also known as Stock dividend these are paid from the profits of a company to the owners of the business (i.e shareholders).cash dividend are not recorded as an expense On a company's income statement. Beacuse cash dividend do not affect a company's net income. Cash dividend treated as part of A company's profit and it reduces cash and retained earnings.so the statement that is .."a company is worse off by paying Cash dividends because it must record a loss for this transaction in its income statement" is false statement.

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