When does a corporation record an increase in Dividends Payable?
A)On the date of record.
B)On the date of payment.
C)On the declaration date.
D)On the date of issuance.

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.The dividend is accounted for by increasing Dividends Payable and increasing a temporary account called Dividends.

When Does a Corporation Record an Increase in Dividends Payable