When a company pays dividends it doesnt have to be cash it c

When a company pays dividends it doesn\'t have to be cash, it could be another asset. the dividends account will be increased with a credit. the retained earnings account will be directly increased with a debit. the dividends account will be decreased with a debit.

Solution

Solution:

When a company pays dividends, it doesn\'t have to be cash, it could be another asset.

Hence first option is correct.