Which of the following statements regarding the date of a cash dividend declaration is not accurate?
A) The dividend can be rescinded once it has been declared.
B) The corporation is committed to a legal binding obligation.
C) The board of directors formally authorizes the cash dividend.
D) A liability account must be increased.

Question

Quizplus · Accepted Answer

Once a cash dividend has been declared, the corporation is legally obligated to pay it and cannot rescind the declaration unless there are extraordinary circumstances. Therefore, statement A is not accurate. Statements B, C, and D are accurate.

Which of the Following Statements Regarding the Date of a Cash