Spot Corporation declared a cash dividend on December 30, 20X1, payable on January 10, 20X2. A journal entry for the dividend was not made in December 20X1. What were the effects on the 20X1 financial statements?
A) Retained earnings and liabilities were understated.
B) Retained earnings and liabilities were overstated.
C) Retained earnings was overstated and liabilities understated.
D) Retained earnings was overstated and cash understated.
Correct Answer:
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A)
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