The Dividends account
A) appears on the income statement along with the expenses of the business.
B) must show transactions every accounting period.
C) is increased with debits and decreased with credits.
D) is not a proper subdivision of retained earnings.

Question

Quizplus · Accepted Answer

The Dividends account is a temporary equity account that is increased with debits and decreased with credits. It reflects the amount of money paid out to shareholders as dividends. It does not appear on the income statement, but is instead closed out to Retained Earnings at the end of each accounting period.

The Dividends Account