On Which of the Following Dates Do Dividends Become a Liability

question 21

Multiple Choice

On which of the following dates do dividends become a liability of a company?

• A)On the date of record
• B)On the declaration date
• C)At the end of the financial year
• D)On the payment date

Comprehend current tax laws and their implications on investments.

Calculate the depreciation and understand its impact on the Balance Sheet.

Define and calculate earnings before interest and taxes (EBIT).

Recognize the significance and classification of dividends, retained earnings, and stock values in financial statements.

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Definitions:

Stockholders' Equity

The remaining interest in a corporation's assets once all debts have been subtracted.

Reacquired Shares

Shares purchased back by the issuing company, reducing the number of shares available on the open market.

Balance Sheet

A balance sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Par Common Stock

The face value assigned to common stock shares, representing the minimum amount that can be credited to share capital; it is not necessarily indicative of the market value.