Question

Question 1 of 10

A corporation announces that it will pay its stockholders a cash dividend. On
that day, the total amount of the dividend is credited as
A. Cash Dividends
O B. Cash
C. Dividend Expense
D. Dividends Payable
SUBMIT

Answer 1

D. Dividends Payable

Step-by-step explanation:

On the day dividends are declared, the amount declared is debited to the retained earnings accounts and credited to the dividend payable accounts. The dividends have not yet been paid, meaning the money is still with the company. For this reason, the cash account.

A dividend is not an expense, so there can never be a dividend expense account.