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The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

A. True
B. False

User Sahil
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2 Answers

4 votes

Final answer:

The amount of a cash dividend liability is recorded on the declaration date, not the date of record. The date of record is simply for identifying eligible shareholders, with no accounting entry required.

Step-by-step explanation:

The statement is false. The amount of a cash dividend liability is recorded on the declaration date, not on the date of record. On the declaration date, the board of directors of a company announces the dividend and it becomes a binding legal obligation. Conversely, the date of record is the date set by the company to determine which shareholders are eligible to receive the dividend. No entry is made in the accounting records on the date of record; it is merely the date for identifying shareholders to receive dividends.

User SnapJag
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3 votes

Answer:

A. True

Step-by-step explanation:

A financial statement is a written report that quantitatively describes a firm's financial health. Under the financial statements is a cash-flow statement, which is used to record the cash inflow and cash equivalents leaving a business firm.

Cash flow statement, also known as the statement of cash flows, contains financial information about operating, financial and investing activities.

Basically, financial statements are formally written records of the business and financial activities of a business entity or organization.

There are four (4) main types of financial statements and these are;

1. Cash flow statement: it contains financial information about operating, financial and investing activities.

2. Statement of changes in equity: it contains financial information about profits or loss, dividends, etc.

3. Income statement: it contains financial information about the income and expenses of an organization.

An income statement comprises of the financial information about the income and expenses of an organization over a specific period of time.

4. Balance sheet: it contains financial information about assets, liability, and equity.

Furthermore, the amount of a cash dividend liability is expected to be recorded on the particular date of record because it is this date that identify the persons or entities who receives the dividend.

User Bladebunny
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