Your business declared a $200 dividend on August 31,payable in September.On August 31,which of the following adjusting journal entries would be made?
A)Debit Dividends Receivable for $200; credit Dividends Declared for $200.
B)Debit Dividends Declared for $200; credit Dividends Payable for $200.
C)Debit Dividends Payable for $200; credit Dividends Declared for $200.
D)Debit Dividends Declared for $200; credit Dividends Receivable for $200.

Question

Quizplus · Accepted Answer

When a company declares a dividend, it debits Dividends Declared (or Dividends) to recognize the expense and credits Dividends Payable to recognize the liability it has incurred until the dividend is paid.

Your Business Declared a $200 Dividend on August 31,payable in September.On