When Is a Liability for Dividends Created

question 7

Multiple Choice

When is a liability for dividends created?

• A)at the end of each fiscal year
• B)at the date of declaration
• C)at the date of record
• D)at the date of payment

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Definitions:

Accounting Basis

The method in which income and expenses are recognized in the accounts; common methods include cash basis and accrual basis accounting.

Computation

The process of performing mathematical calculations or processing data using algorithms, often carried out by computers.

Average Accounting Return

A financial ratio that reflects the average net income that a project or investment generates compared to its initial cost or average investment.

Arbitrary Value

An arbitrary value is a value assigned based on discretion or judgment rather than from an objective calculation or measurement.