When a cash dividend is declared, what accounts on the financial statements are affected?

Name: When a cash dividend is declared, what accounts on the financial statements are affected?
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Question

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When a cash dividend is declared, it affects two accounts on the financial statements: dividends payable (a liability account) and retained earnings (an equity account). The declaration of the dividend increases the dividends payable account and decreases the retained earnings account.

When a Cash Dividend Is Declared, What Accounts on the Financial