Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

12. Stockholders' Equity

Dividends and Dividend Preferences

Financial Accounting

12. Stockholders' Equity

Dividends and Dividend Preferences

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Multiple Choice

Who might receive dividends from a mutual insurer?

Employees

Shareholders

Policyholders

Bondholders

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Understand the concept of a mutual insurer: A mutual insurer is an insurance company owned by its policyholders rather than shareholders. The primary goal of a mutual insurer is to provide insurance coverage to its members at the lowest possible cost.

Clarify the role of dividends in a mutual insurer: Dividends in a mutual insurer are typically distributed to policyholders as a return of excess premiums or profits. These dividends are not guaranteed and depend on the financial performance of the insurer.

Eliminate incorrect options: Employees, shareholders, and bondholders do not receive dividends from a mutual insurer because they are not owners of the company. Mutual insurers do not have shareholders, and bondholders are creditors, not owners.

Identify the correct recipient: Policyholders are the owners of a mutual insurer and are entitled to receive dividends if the company performs well financially and has excess funds.

Conclude the reasoning: Policyholders receive dividends because they are the owners of the mutual insurer, and the dividends represent a return of surplus funds or profits generated by the company.