When the board of directors declares a $500 dividend,which of the following would be included in recording the transaction?
A)increase in Retained Earnings,increase in Dividends Declared
B)decrease in Cash,decrease in Dividends Payable
C)increase in Dividends Declared,increase in Dividends Payable
D)decrease in Dividends Payable,increase in Cash

Question

Quizplus · Accepted Answer

When a board of directors declares a dividend, it increases Dividends Declared (reflecting the decision to pay dividends) and increases Dividends Payable (liability account showing the amount owed to shareholders). This does not immediately affect Cash or Retained Earnings; those accounts are affected when the dividend is actually paid.

When the Board of Directors Declares a $500 Dividend,which of the Following