easy · Investment Banking accounting
If a company pays a $1,500 cash dividend to its shareholders, how does this affect the balance sheet identity?
- Cash decreases by 1,500 and Retained Earnings decreases by1,500.
- Cash decreases by 1,500 and Total Liabilities increases by1,500.
- Cash decreases by 1,500 and Net Income decreases by1,500.
- Shareholders' Equity remains unchanged because it is a transfer between equity accounts.
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