If a balance sheet is prepared between the date of declaration and date of payment, dividends payable accounts are reported as current liabilities.

Question

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Dividends payable accounts represent a current obligation that will be paid within one year of the balance sheet date, so they are classified as current liabilities on the balance sheet. If the balance sheet is prepared between the date the dividends are declared and the date they are paid, the amount of dividends payable at that date will be included as a current liability.

If a Balance Sheet Is Prepared Between the Date of Declaration