The classification and normal balance of the dividends account is
A) an expense with a credit balance
B) an expense with a debit balance
C) a liability with a credit balance
D) stockholders' equity with a debit balance

Question

Quizplus · Accepted Answer

Dividends account is a temporary account under the stockholders' equity section and has a debit balance. This account is debited when the company declares cash or stock dividends, and the corresponding entry is made to reduce retained earnings. At the end of the accounting year, the account is closed to Retained Earnings, which also has a credit balance.

The Classification and Normal Balance of the Dividends Account Is