Answer to Question #152655 in Management for Wajahat Ali Raki

Question #152655
Why are the firm’s employees not valued as asset on balance sheet? (b) Can cash dividends be paid from retained earnings? Comment?
1
Expert's answer
2020-12-25T04:26:26-0500

Why the Firm’s Employees are not Valued as Asset on Balance Sheet

Companies' assets are the things that the Corporations own such as cars and buildings. The reason why the firm's workers are not valued as an asset on the balance sheet is that the businesses do not own the employees. According to Gadekar, workers are not assets because firms do not regulate them. Employees change raw materials to finished stock in exchange for payment. Nevertheless, if the employees feel like quitting, they go with their skills and training. Therefore, firms cannot value their workers as assets on the balance sheet.

Whether Cash Dividends can be Paid from Retained Earnings

Yes, cash dividends can be paid from retained earnings. However, it follows a process. First, companies declare dividends then debit their retained earnings while crediting dividends payables account. As the firms pay the dividends, they debit the dividends payables account while crediting the cash account. Therefore, in this case, cash dividends are paid from retained earnings as it is the source.


Works Cited

Gadekar, Sonali. "Managing Intangible Assets by Measurement of Human Capital." Apotheosis: 85.


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS