A corporation records a dividend-related liability
A)on the record date.
B)on the payment date.
C)when dividends are in arrears.
D)on the declaration date.

Question

Quizplus · Accepted Answer

A corporation records a dividend-related liability on the declaration date, which is when the board of directors officially approves and declares the dividend. This is the point at which the obligation to pay the dividend becomes formal and must be recognized in the financial statements.

A Corporation Records a Dividend-Related Liability