The payment date for a dividend is the date on which the company:
A)debits Dividends Declared and credits Dividends Payable for the amount of the dividend.
B)debits Dividend Expense and credits Cash for the dividend amount.
C)debits Dividends Payable and credits Cash for the dividend amount.
D)establishes who will receive the dividend payment.

Question

Quizplus · Accepted Answer

On the payment date of a dividend, the company pays out the dividend to its shareholders. This results in a decrease in cash (credited) and a decrease in the dividends payable account (debited). Therefore, choice C is the correct answer as it correctly identifies the accounts that are affected on the payment date.

The Payment Date for a Dividend Is the Date on Which