Ursula Company declared dividends of $ 20,000 in fiscal 2021 and paid the $ 42,000 dividends that were declared in fiscal 2020. Ursula paid the 2021 dividends in early fiscal 2022. Which of the following journal entries would NOT be recorded in fiscal 2021?
A) debit to Cash Dividends and credit to Dividends Payable for $ 20,000
B) debit to Dividends Payable and credit to Cash for $ 42,000
C) debit to Retained Earnings and credit to Cash Dividends for $ 20,000
D) debit to Dividends Payable and credit to Cash for $ 20,000

Question

Quizplus · Accepted Answer

The entry in option D would not be recorded in fiscal 2021 because the $20,000 dividend declared in 2021 was paid in fiscal 2022, not 2021.

Ursula Company Declared Dividends of $ 20,000 in Fiscal 2021