question 4\ndividends are declared and paid to the companys stockholders. what effect does this transaction…

question 4\ndividends are declared and paid to the companys stockholders. what effect does this transaction have on the companys accounting equation?\no a. assets and retained earnings decrease.\no b. assets and liabilities decrease.\no c. liabilities increase and contributed capital decreases.\no d. liabilities decrease and retained earnings increases.

question 4\ndividends are declared and paid to the companys stockholders. what effect does this transaction have on the companys accounting equation?\no a. assets and retained earnings decrease.\no b. assets and liabilities decrease.\no c. liabilities increase and contributed capital decreases.\no d. liabilities decrease and retained earnings increases.

Answer

Brief Explanations:

When dividends are declared and paid, cash (an asset) decreases as money is given out. Also, retained earnings decrease because dividends are paid out of retained earnings. Assets and retained - earnings are on the right - hand side of the accounting equation (Assets = Liabilities + Equity, where retained earnings is part of equity). So, assets and retained earnings decrease.

Answer:

A. Assets and retained earnings decrease.