Cash dividends usually are declared on one date and paid on a subsequent date to shareholders of record on some intermediate date.On which of the following dates should an accrual basis shareholder recognize investment revenue?

Question

Quizplus · Accepted Answer

Accrual basis accounting recognizes revenue when it is earned, regardless of when the cash is received. Therefore, a shareholder should recognize investment revenue on the declaration date, as this is when the company officially commits to paying the dividend.

Cash Dividends Usually Are Declared on One Date and Paid