Which of the following statements is false?
A)The declaration of a cash dividend creates a liability as of the date of record.
B)The date of record is irrelevant with respect to recording a liability for a cash dividend.
C)The dividend payment date is when the dividend liability is reduced.
D)The dividend liability for a cash dividend is created on the declaration date.

Question

Quizplus · Accepted Answer

The declaration of a cash dividend actually creates a liability on the declaration date, not the date of record. The date of record is simply the date when the company determines who will receive the dividend, but no liability is recorded or changed on this date.

Which of the Following Statements Is False