alleryStart learning →Which of these is true of dividends paid and the income statement?
AThey reduce gross profit
BThey appear as an expense
CThey appear as revenue
DThey do not appear on it
Answer & Solution
Correct answer: D. They do not appear on it
Dividends paid do not appear on the income statement, though they affect the balance sheet.
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Related questions
Which limits can restrict how much a firm may distribute as dividend?Why might management avoid changing dividend policy abruptly?Which alternative to cash dividends may a firm choose when surplus cash exists?Which type of shareholder usually prefers earnings to be retained?With no NPV-positive projects and surplus cash, what should management do?Management knowing more than the market is called what?If dividends bear higher tax than gains, raising them does what to value?Per the Modigliani-Miller theorem, dividend policy has what effect on firm value?