The Entry on the Payment Date for a Cash Dividend

question 124

True/False

The entry on the payment date for a cash dividend involves a debit to retained earnings and a credit to cash.

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Definitions:

Operating Cash Flow

Cash generated from a company's regular business operations, excluding investment and financing activities.

Accounts Receivable

Money owed to a business by its customers for products or services that have been delivered but not yet paid for.

Long-Term Asset

Assets owned by a company that are intended for use over a long duration, typically more than one year, such as real estate, machinery, and patents.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investing, and financing activities.