The balance in the Common Stock Dividend Distributable account should be reported as a(n)
A) deduction from the Common Shares account.
B) addition to contributed capital.
C) current liability.
D) contra-asset.

Question

Quizplus · Accepted Answer

The balance in the Common Stock Dividend Distributable account is reported as an addition to contributed capital because it represents amounts that are to be issued as common stock dividends, indicating an increase in the shareholders' equity under contributed capital.

The Balance in the Common Stock Dividend Distributable Account Should