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Shows the effect of the transaction on accounting equation

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Question 1: Sampson Corporation pays dividends of $9,000 to shareholders. Which of the following statements correctly shows the effect of this transaction on the accounting equation?

Option 1: Assets will decrease by $9,000, liabilities will remain unchanged, and stockholders' equity will increase by $9,000

Option 2: Assets will increase by $9,000, liabilities will remain unchanged, and stockholders' equity will increase by $9,000

Option 3: Assets will remain unchanged, liabilities will increase by $9,000, and stockholders' equity will decrease by $9,000

Option 4: Assets will decrease by $9,000, liabilities will remain unchanged, and stockholders' equity will decrease by $9,000

Reference no: EM132538933

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