The advantage of debiting a Cash Dividend account, instead of Retained Earnings, is that
A) no closing entry is required at the end of the accounting period.
B) it allows users to pay the dividends much earlier.
C) it makes it easy to keep track of the dividends declared.
D) Cash Dividend is permanent account whereas Retained Earnings is a temporary account.

Question

Quizplus · Accepted Answer

Debiting a Cash Dividend account makes it easier to track the dividends declared separately from Retained Earnings, which helps in financial reporting and analysis.

The Advantage of Debiting a Cash Dividend Account, Instead of Retained