After a corporation declares a cash dividend, what takes place on the date of record?

Question

Quizplus · Accepted Answer

On the date of record, no entry is necessary in the company's accounting records. The date of record is simply the date on which the company determines which shareholders are eligible to receive the dividend payment. It is important for shareholders to own the stock by the date of record in order to receive the dividend. However, the actual distribution of cash to shareholders will take place on the payment date, not the date of record.

After a Corporation Declares a Cash Dividend, What Takes Place