Final dividend payable is classified as what type of account?

Question

Quizplus · Accepted Answer

Final dividend payable is classified as a liability because it represents a debt owed by the company to its shareholders, which will be paid out in the future. It is not an expense because it does not represent the cost of goods or services used in the company's operations. It is not shareholder's equity because it represents a liability to shareholders, not an ownership interest. It is also not retained earnings because it has not yet been paid out and is still a liability on the company's balance sheet.

Final Dividend Payable Is Classified as What Type of Account