When Do Dividends Become Liabilities

question 81

Multiple Choice

When do dividends become liabilities?

• A) On the date of record
• B) On the declaration date
• C) On the payment date
• D) Dividends are never liabilities because a company is not legally required to pay dividends

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Definitions:

Fees Earned

Revenues generated from providing services to clients or customers.

Income Statement

The income statement is a financial report that gives a summary of a company's revenue, expenses, and profits over a specific period, showing how revenue is transformed into net income.

Business Users

Individuals or groups within an organization who utilize and apply business data and information in their decision-making processes.

Statement Of Owner's Equity

A financial document that shows changes in the owner's equity account over a period, including contributions, withdrawals, and the business's net income or loss.