The Digby Company has just issued $7,169,042 in dividends last year. The effect

Question

The Digby Company has just issued $7,169,042 in dividends last year. The effect of this payment on the balance sheet is: Select: 1 Liabilities will increase $7,169,042 Net Profit will decrease $7,169,042 Equity will decrease $7,169,042 Expenses will increase $7,169,042
The Digby Company has just issued $7,169,042 in dividends last year. The effect of this payment on the balance sheet is: Select: 1 Liabilities will increase $7,169,042 Net Profit will decrease $7,169,042 Equity will decrease $7,169,042 Expenses will increase $7,169,042

Explanation / Answer

The effect of the payment will be that Net profit will decrease by $7169042 since the amount of distributed from the profits earned by the company during the year. The more the dividend, the lesser the profits left for the company

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