The Dividends Declared account
A)appears on the statement of income along with the expenses of the business.
B)must show transactions every accounting period.
C)is increased with debits and decreased with credits.
D)is not a proper subdivision of shareholders' equity.

Question

Quizplus · Accepted Answer

The Dividends Declared account is increased with debits when dividends are declared and decreased with credits when they are paid out, reflecting its nature as a contra equity account that reduces shareholders' equity.

The Dividends Declared Account