Question

The journal entry on August 7 would be called the: 2017 August 7 Retained earnings 10,000 Dividends payable 10,000 October 31 Dividends payable 10,000 Cash 10,000

a. date of record.
b. date of payment.
c. date of dividends.
D. date of declaration.

Answer 1

The August 7 journal entry that includes debiting Retained earnings and crediting Dividends payable is known as the date of declaration. It's the date when a dividend is officially declared by the board of directors. Other important dates include the date of record and the date of payment.

Step-by-step explanation:

The journal entry on August 7 is called the date of declaration. This is when a company's board of directors formally declare a dividend to be paid to shareholders and record it in their financial statements. The entry consists of a debit to Retained earnings and a credit to Dividends payable, reflecting the obligation to pay shareholders. On October 31, the company fulfills this obligation by recording the payment, debiting Dividends payable and crediting Cash. The date of record and date of payment are other key dates in the dividend process, the former being when the company determines who is eligible to receive the dividend and the latter when the dividend is actually paid out to investors.