Question
Asked Oct 14, 2019
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The board of directors of Kenzie Jane’s Laundry Company declared a cash dividend on July 15, 2017. The dividend is to be paid on August 15, 2017, to stockholders of record on July 31, 2017. The correct recording on August 15, 2017, will include a(n)

  1. increase to Dividends

    decrease to Dividends

    increase to Dividends Payable

    decrease to Dividends Payable

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Expert Answer

Step 1

Cash dividend:

 

The amount of cash provided by a company out of its distributable profits as a return for the amount invested by them is referred as cash dividend.

Step 2
  • On July 15, 2017, a liability to pay a cash dividend to the stockholders arises, and hence, Dividends Payable account (liability account) is increased.

 

  • On August 15, 2017, cash div...

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