The liability for a dividend is recorded on which of the following dates?
A) date of record
B) date of payment
C) last day of the fiscal year
D) date of declaration

Question

Quizplus · Accepted Answer

The liability for a dividend is recorded on the date of declaration, which is when the board of directors officially declares the dividend and sets the amount to be paid to shareholders. At this point, the company incurs a legal obligation to pay the dividend and is required to record it as a liability on its balance sheet. The other options (date of record, date of payment, last day of the fiscal year) are important dates in the dividend process but do not involve recording the liability for the dividend.

The Liability for a Dividend Is Recorded on Which of the Following