Question

Concord Company pays cash dividends of $670. The entry for this transaction will include a debit of $670 to

a. Owner's Salaries Expense
b. Salaries and Wages Expense
c. Dividends
d. Retained Earnings

Answer 1

c. Dividends

Step-by-step explanation:

Whenever, dividends are recorded as a liability then that amount is charged against retained earnings, but the final entry for payment of dividend =

Dividend A/c Dr. $670

To Cash A/c. $670

Also at the time of recording as an expense, entry will be

Retained Earnings A/c Dr. $670

To Dividend A/c $670

Since retained earning balance will be reduced and finally cash balance will also be reduced.

Therefore, entry for payment will include debit to

c. Dividends