On the Dividend Record Date

question 93

Multiple Choice

On the dividend record date

• A) a dividend becomes a current obligation.
• B) no entry is required.
• C) an entry may be required if it is a stock dividend.
• D) Dividends Payable is debited.

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Definitions:

Monthly Compounded

A method of calculating interest where the interest amount is added to the principal at the end of each month, increasing the amount on which subsequent interest is calculated.

Compounded Monthly

Calculating interest earnings using both the initial principal and previously earned interest on a monthly basis.

Effective Annual Rate

The annual interest rate that accounts for compounding over a given period, providing a true reflection of financial costs.

Compounded Quarterly

Interest calculation method where the interest is added to the principal four times a year, enhancing the effect of compounding over time.