Which of the following occurs when a previously declared dividend is paid?
A) Assets increase.
B) Equity increases.
C) Liabilities decrease.
D) Liabilities increase.

Question

Quizplus · Accepted Answer

When a dividend is declared, it is recorded as a liability because the company now owes this amount to its shareholders. Once the dividend is paid, this liability decreases because the company has fulfilled its obligation to pay the dividend.

Which of the Following Occurs When a Previously Declared Dividend