When an entity declares 10% share dividends, the Share Premium and Retained Earnings will both be the same decrease and not change, respectively not change and decrease, respectively increase and decrease, respectively

When an entity declares 10% share dividends, the Share Premium and Retained Earnings will both be the same decrease and not change, respectively not change and decrease, respectively increase and decrease, respectively

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

When an entity declares 10% share dividends, the Share Premium and Retained Earnings will

both be the same

decrease and not change, respectively

not change and decrease, respectively

increase and decrease, respectively

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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