Final answer:
The dividend payment date is when a company disburses cash to its shareholders, fulfilling the declared dividend liability. The company removes the liability from its balance sheet once the disbursement is completed.
Step-by-step explanation:
The dividend payment date is when cash is disbursed to satisfy the dividend liability. On the dividend payment date, the company issuing the dividend transfers funds to its shareholders as a return on their investment in the company's equity. Prior to the dividend payment date, a company declares a dividend, then records a dividend liability on its balance sheet. Once the dividend payment date arrives, the company will release the funds to the shareholders, typically through electronic transfer or by mailing checks, and the relevant liability is removed from the company's balance sheet.