The Dividends account increases with a credit and decreases with a debit.The Dividends account increases with a debit and decreases with a credit.

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The correct statement is that the Dividends account increases with a debit and decreases with a credit. When a dividend is declared, the amount is debited to the Retained Earnings account and credited to the Dividends account, resulting in an increase to the Dividends account balance. When the dividend is paid out to shareholders, the Dividends account is debited and the Cash account is credited, resulting in a decrease to the Dividends account balance.

The Dividends Account Increases with a Credit and Decreases with a Debit.The