Final answer:
The correct answer is D. All of these decrease retained earnings. Cash dividends, liquidating dividends, and stock dividends all reduce the retained earnings of a company.
Step-by-step explanation:
The correct answer is D. All of these decrease retained earnings.
Retained earnings are the accumulated profits that a company has not distributed to its shareholders as dividends. When a company pays out cash dividends, it reduces its retained earnings because it is distributing a portion of its profits to shareholders.
Liquidating dividends also decrease retained earnings. Liquidating dividends are payments made to shareholders when a company is liquidating its assets and winding down its operations. These payments come from the remaining assets of the company, including retained earnings.
Stock dividends, on the other hand, do not decrease retained earnings. Instead of distributing cash, the company issues additional shares of stock to its shareholders. This has the effect of reallocating a portion of retained earnings into additional shares, but it does not reduce the overall amount of retained earnings.
Therefore, the correct answer is D. All of these (cash dividend, liquidating dividend, and stock dividend) decrease retained earnings.