Dividends are paid with cash to shareholders. Dividends are in what category of the chart of accounts?

Name: Dividends are paid with cash to shareholders. Dividends are in what category of the chart of accounts?
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Quizplus · Accepted Answer

Dividends are paid from a company's earnings to its shareholders, reducing the amount of retained earnings and increasing dividends payable. Therefore, dividends are classified as a reduction in shareholders' equity rather than revenue or liabilities.

Dividends Are Paid with Cash to Shareholders