When does a company record dividends payable?
A)On date of record.
B)On ex-dividend date.
C)On payment date.
D)On declaration date.

Question

Quizplus · Accepted Answer

Dividends payable is recorded by the company on the declaration date, which is the date when the company's board of directors announces and authorizes the payment of dividends to the shareholders. This is the date when the company incurs the liability to pay dividends to its shareholders, and thus records a liability for dividends payable in its accounting records. The date of record is used by the company to determine which shareholders are entitled to receive the dividend, while the ex-dividend date is used to determine which shareholders are not entitled to receive the dividend. The payment date is the date when the company actually pays the dividend to the shareholders.

When Does a Company Record Dividends Payable