Final answer:
An expense is a cost of doing business, while a dividend is a payment made to shareholders. The correct answer is a) Expense, dividend. Expenses are incurred during operations, while dividends are profit distributions.
Step-by-step explanation:
A expense is a cost of doing business during the period, whereas a dividend is a distribution of cash to stockholders. Therefore, the correct answer to the fill-in-the-blanks question is: a) Expense, dividend.
Dividends are direct payments made by a company to its shareholders as a part of the profits. For instance, if a stock pays a dividend of 75 cents a share and an individual owns 85 shares, they would receive a total dividend proportional to their shares. Stable companies, such as utility companies, often provide dividends to their shareholders as a way to distribute profits.
On the other hand, expenses refer to the costs incurred by a company during its operation to generate revenue. These could include costs such as salaries, rent, utilities, and materials needed for production or services.
Additionally, the increase in the value of stock from the time of purchase to the time of sale is called capital gain, which is different from dividends and is related to the appreciation of an investment over time.
Answer: a) Expense, dividend