Port,Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Question

Quizplus · Accepted Answer

When a company declares a dividend, it creates a liability on its books called "Cash Dividend Payable." When the dividend is paid, the company reduces this liability by actually giving the cash to its shareholders, resulting in a decrease in the Cash Dividend Payable account and a decrease in its cash account. Therefore, the correct answer is B: decrease Cash Dividend Payable and decrease Cash.

Port,IncPaid a Cash Dividend on January 2 That Had Been