The journal entry to record the declaration of a cash dividend would include a:
A)credit to Cash
B)debit to Dividend Expense
C)debit to Retained Earnings
D)debit to Dividends Payable

Question

Quizplus · Accepted Answer

When a company declares a cash dividend, it reduces its retained earnings, which is an equity account, to reflect the future payout of cash to shareholders. This is recorded by debiting Retained Earnings.

The Journal Entry to Record the Declaration of a Cash