Dividend: The amount that shareholders receive in return of their investment is called a dividend. The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock. Declaration date: The date on which company’s board of directors formally proclaims the payment of dividend is the declaration date. After the date of declaration, the company becomes liable for payment of dividend. During the same date, an outstanding dividend payment of the company is also recorded. Record date: Record date is the date when company records the names of those shareholders who are liable to receive the dividend. Before record date, company updates the records of all shareholders. Payment date: The date on which actual payment is made to the shareholders is called as payment date. In case of excess cash, the company pays a large sum of money as a dividend. On payment date, the outstanding dividend payment is also made to the shareholders. To journalize: The transactions on the appropriate dates to record the declaration and payment of cash dividend.

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Chapter 14, Problem 14.1BE

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Dividend: The amount that shareholders receive in return of their investment is called a dividend. The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.

Declaration date: The date on which company’s board of directors formally proclaims the payment of dividend is the declaration date. After the date of declaration, the company becomes liable for payment of dividend. During the same date, an outstanding dividend payment of the company is also recorded.

Record date: Record date is the date when company records the names of those shareholders who are liable to receive the dividend. Before record date, company updates the records of all shareholders.

Payment date: The date on which actual payment is made to the shareholders is called as payment date. In case of excess cash, the company pays a large sum of money as a dividend. On payment date, the outstanding dividend payment is also made to the shareholders.

To journalize: The transactions on the appropriate dates to record the declaration and payment of cash dividend.

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