Question

Which of the following transactions decreases total assets?

a.Pay dividends to stockholders.
b.Receive cash from customers for sales in the current period.
c.Purchase supplies on account.
d.Receive a utility bill but do not pay it.

Answer 1

Paying dividends to stockholders decreases the total assets of a company by distributing cash or other assets to the owners of the company.

Step-by-step explanation:

The correct answer is a. Pay dividends to stockholders. Paying dividends to stockholders decreases the total assets of a company because it involves distributing cash or other assets to the owners of the company.

For example, if a company pays out a dividend of $10,000 to its stockholders, this cash amount would be subtracted from the company's total assets, resulting in a decrease in the overall asset value.