Asked by
Laney Moore
on Oct 15, 2024
Verified
The journal entry to record the declaration of dividends on common stock includes a debit to Retained Earnings and a credit to Common Dividend Payable.
Retained Earnings
Profits that a company has decided to keep and reinvest in the business rather than distribute to shareholders.
Common Dividend Payable
A liability on the balance sheet representing the amount of dividends declared by a company's board of directors to be distributed to common shareholders.
- Comprehend the financial and accounting consequences of the declaration and disbursement of dividends on stockholders' equity and retained profits.
Verified Answer
TF
Learning Objectives
- Comprehend the financial and accounting consequences of the declaration and disbursement of dividends on stockholders' equity and retained profits.
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