On the Dividend Record Date

question 5

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:

Dividends Declared

A formal announcement by a company's board of directors to pay dividends to shareholders, specifying the amount and payment date.

Declaration Date

The date on which a company's board of directors announces the issuance of a dividend to its shareholders.

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing the ownership interest of shareholders.