Which of the following statements regarding the date of a cash dividend declaration is not true?
A) The dividend can be cancelled once it has been declared.
B) The corporation is committed to a legal, binding obligation.
C) The board of directors formally authorizes the cash dividend.
D) A liability account must be created or increased.

Question

Quizplus · Accepted Answer

Once a cash dividend is declared by the board of directors, it becomes a legal obligation of the corporation and cannot be cancelled.

Which of the Following Statements Regarding the Date of a Cash