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

Question

Quizplus · Accepted Answer

When a dividend is declared, a company's liabilities increase because the declaration creates a legal obligation to pay the shareholders, thus increasing the dividends payable account under liabilities.

Which of the Following Occurs When a Dividend Is Declared