Accounting · Dividend Transactions
When an entity pays a cash dividend to its shareholders, which accounting entry is required to record the transaction?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Debit Profit or loss account, Credit Bank
- 2Debit Retained earnings, Credit Bank✓
- 3Debit Share premium, Credit Bank
- 4Debit Share capital, Credit Bank
Correct answer
Debit Retained earnings, Credit Bank
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