The declaration of a cash dividend causes an increase in a corporation's liabilities at the date of declaration.

Name: The declaration of a cash dividend causes an increase in a corporation's liabilities at the date of declaration.
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Question

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When a corporation declares a cash dividend, it creates a liability for itself to pay out that dividend to its shareholders. Therefore, the declaration of a cash dividend does cause an increase in the corporation's liabilities.

The Declaration of a Cash Dividend Causes an Increase in a Corporation's