The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Question

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The amount of a cash dividend liability is actually recorded on the date of declaration, not the date of record. The date of record is used to determine who the actual shareholders are as of that date, and they will be the ones to receive the dividend when it is paid out.

The Amount of a Cash Dividend Liability Is Recorded on the Date