On November 1,2017,President,Inc.declared a dividend of $3.00 per share.President,Inc.has 10,000 shares of common stock outstanding and 20,000 of preferred stock.The date of record is November 15,and the payment date is November 30,2017.Regarding the date of record,which of the following statements is true?

Question

Quizplus · Accepted Answer

The date of record is the date on which shareholders are identified and entitled to receive the dividend. This information is important for the company to prepare the list of shareholders who will receive the dividend payment. No journal entry is made on the date of record as no cash is disbursed, and liabilities are not recorded until the payment date.