When should cash dividends be recorded?

Question

Quizplus · Accepted Answer

Cash dividends should be recorded on the declaration date, which is when the board of directors officially announces the dividend to shareholders. This is the date that triggers a liability for the company to pay out the dividend and should be recorded in the company's books. The payment date is when the actual cash is distributed to shareholders and does not impact the accounting treatment. The date of record is used to determine which shareholders are eligible to receive the dividend, but it does not impact the accounting treatment either. The last day of the accounting period also does not necessarily coincide with the declaration date or any other relevant dividend-related date.

When Should Cash Dividends Be Recorded