If Golden Corporation declared a dividend to its shareholders which has not been paid,this would
A)increase liabilities.
B)increase shareholders' equity.
C)decrease liabilities.
D)increase assets.

Question

Quizplus · Accepted Answer

When a dividend is declared but not yet paid, it creates a liability for the company as it owes money to its shareholders. Therefore, option A is correct as declaring a dividend increases the liability of the company. Option B is not correct as it would only increase shareholders' equity once the dividend is actually paid out. Option C is not correct as declaring a dividend does not reduce liabilities. Option D is not correct as declaring a dividend does not increase assets.

If Golden Corporation Declared a Dividend to Its Shareholders Which