A mining company declared a liquidating dividend. The journal entry to record the declaration must include a debit to
A) Retained Earnings.
B) Contributed Capital.
C) Accumulated Other Comprehensive Income.
D) Dividend Payable.

Question

Quizplus · Accepted Answer

A liquidating dividend is a return of capital to shareholders, so the declaration involves debiting Contributed Capital, as it reduces the company's paid-in capital.

A Mining Company Declared a Liquidating Dividend