Asked by Daniel Amoako on Jun 20, 2024
Verified
The correct entry to be recorded on August 15, 2022 will include a
A) debit to Dividends Declared.
B) credit to Retained Earnings.
C) credit to Dividends Payable.
D) debit to Dividends Payable.
Dividends Payable
A liability indicating the amount of dividends that a company has declared to pay out to its shareholders but has not yet paid.
Dividends Declared
profits that a company's board of directors has decided to distribute to shareholders, typically in the form of cash payments or additional shares.
- Identify the correct journal entries for dividend declarations and payments.
Verified Answer
YY
yolanda yanezJun 25, 2024
Final Answer :
D
Explanation :
On August 15, 2022, the company pays out the dividends, so the correct entry involves debiting Dividends Payable to remove the liability of the dividend payment.
Learning Objectives
- Identify the correct journal entries for dividend declarations and payments.