Final answer:
A dividend becomes a liability for a corporation once it is declared by the board of directors, signifying the company's legal obligation to pay its shareholders.
Step-by-step explanation:
it is declared by the board of directors:
A dividend becomes a liability to a corporation when it is declared by the board of directors. The declaration of a dividend by a company's board of directors initiates the creation of a legal obligation for the company to pay its shareholders. Once the board approves and declares a dividend, it is recorded in the company's accounts as a liability. This is because it now represents an amount that is owed to shareholders.
The ex-dividend date, fiscal year end, or quarterly periods do not by themselves trigger the establishment of the dividend as a liability. It is the declaration that commits the corporation to distribute the set amount of money to its shareholders on a specific date in the future, known as the payment date.