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A company pays out a previous declared common stock dividend. What is its effect on the cash?

 a. It will decrease

 b. It will increase

 c. There would be no change

 d. It depends on the dividend date    

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تم إضافة السؤال من قبل حسين محمد ياسين , Finance Manager , مؤسسة عبد الماجد محمد العمر للمقاولات العامة
تاريخ النشر: 2016/02/06
FITAH MOHAMED
من قبل FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

sure>>>>>>>>>>>>>>>>>a. It will decrease

Vikas Bachhuka
من قبل Vikas Bachhuka , Sales Manager - Tire, Lubs & Batteries , ALI ALGHANIM & SONS AUTOMOTIVE CO.

When a company pays out previous declared dividend, the cash will decrease at the same time the liability of dividend to be payable from the balance sheet will will get reduced. 

Tareq Obeidat
من قبل Tareq Obeidat , Chief Accountant , Etmam International Co

The correct option is : 

AIt will decrease .

georgei assi
من قبل georgei assi , مدير حسابات , المجموعة السورية

The decision to announce the distribution of profits from the difficult decisions taken by management and the task that

In the company, because of this decision it has a direct impact on the investor and the company, as the main objective

Any investor is to achieve profits, many investors seeking to make a profit are underway

The result of the distribution process, and that the administration should strike a balance between dividends and profits

Retained, especially in the new and developing companies that are in need of funding, from here to discuss

The impact of this research announcement of the dividend on the stock market and the quantities of the stock price

Traded in the market.

It depends on the date of the announcement of the earnings distribution

d. Depends on the dividend date

Hemachand Chaiyanur Mohanraj
من قبل Hemachand Chaiyanur Mohanraj , Accounts And Admin Executive , Saudi Masterbaker Ltd

the cash will be decreased.

هيثم ناجى
من قبل هيثم ناجى , محاسب اول , الفيوم لصناعة السكر

at firist we need the impact on cash

it will be decreases because there are an amount go out of the cash to pay to the dividend

the correct answer i (a) decreses

but Mr georgie's answer is  correct in the case of needed the general impact

thus his explaination is useful in my openion

thanks for all

Mohammad Iqbal Abubaker
من قبل Mohammad Iqbal Abubaker , Jahaca Pty Ltd - Accounts Administrator , Jahaca Pty Ltd - Accounts Administrator

A company pays out a previous declared common stock dividend. What is its effect on the cash?

 

 a. It will decrease

Md. Shahrier Aswad
من قبل Md. Shahrier Aswad , Accounts Officer, Finance & Accounts Department , Center for the Rehabilitaion of the Paralysed (CRP)

The effect is being sought after the company "Pays". Thats why, in my opinion, the cash must decrease.

I think the answer should be (A).

مستخدم محذوف‎
من قبل مستخدم محذوف‎

The journal entry will be :

Debit / dividend payable account

Credit / cash account 

Mahmoud Hamid
من قبل Mahmoud Hamid , Finance Manager , Experts

Since it was previously declared so the Dividend Pyable account will be debited and the Cash account will be credited. Hence cash will decrease.

Mohamed matar
من قبل Mohamed matar , Finance Manager , ASG Group

 a. It will decrease

Impact be on the cash account irrespective of the date whenever a cash distribution

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