On the declaration date,the company:
A)debits Dividends and credits Dividends Payable for the amount of the dividend.
B)debits Dividend Expense and credits Cash for the dividend amount.
C)debits Dividends Payable and credits Cash for the dividend amount.
D)establishes who will receive the dividend payment.

Question

Quizplus · Accepted Answer

On the declaration date,the company's board of directors formally approves the dividend,thereby creating a legal liability for the corporation.That liability is recorded with a debit to Dividends and a credit to Dividends Payable.

On the Declaration Date,the Company