Your business declared a $200 dividend on August 31,payable in September.On August 31,which of the following journal entries would be made?

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When a company declares a dividend, it creates a liability called dividends payable. On the declaration date, the company debits Retained Earnings (or Dividends) for the amount of the dividend and credits Dividends Payable for the same amount. Therefore, the correct journal entry is to debit Dividends Declared for $200 and credit Dividends Payable for $200. Option A is incorrect because Dividends Receivable is used when the company has already declared a dividend but has not yet paid it. Option C is incorrect because Dividends Payable should be credited on the declaration date, not debited. Option D is incorrect because Dividends Receivable is only used when a company has paid a dividend in advance and is waiting for the record date to arrive before issuing the dividend to the shareholders.

Your Business Declared a $200 Dividend on August 31,payable in September.On