A company declared a cash dividend on its common stock in December 2013,payable in January 2014.Retained Earnings would

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DWhen a company declares a cash dividend, it records a liability for the dividend payable and reduces retained earnings by the amount of the dividend on the date of declaration, not on the date of payment. Therefore, retained earnings are not affected on the date of payment since the reduction occurred at the declaration date.

A Company Declared a Cash Dividend on Its Common Stock