A dividend becomes a liability to a corporation when it is declared by the board of directors. The correct option is option C.
What is a Dividend?
A dividend is a distribution of a portion of a company's earnings or profits to its shareholders. It represents a way for a corporation to share its financial success with its owners, who are the shareholders or stockholders of the company.
A dividend becomes a liability to a corporation when it is declared by the board of directors. The declaration of a dividend represents a legal obligation of the corporation to distribute a portion of its earnings or profits to its shareholders. At this point, the corporation incurs a liability on its balance sheet, as it is obligated to make the dividend payment to the shareholders on a specified date in the future.