Investor Glossary-dividends payableInvestor Glossary-dividends payableInvestor Glossary-dividends payableInvestor Glossary-dividends payableInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Dividends Payable

The HTML to link to this page
 

Dividends payable is a liability of the firm for the cash dividends owed to shareholders. Suppose a company's board of directors on August 1 declares a quarterly dividend of $1 for each of the firm's 500,000 outstanding common shares, which is payable on August 25 to shareholders of record on August 15. On August 1, the dividends payable account is credited for $500,000 and retained earnings is debited for $500,000. On August 15, dividends payable is neither debited or credited. When dividends are paid on August 25, dividends payable is debited for $500,000 and cash is credited for $500,000. Because dividends are usually paid quickly, dividends payable is classified as a current liability on the balance sheet. Dividends payable is different than other current liabilities, since dividends payable represents funds the owners owe to themselves. Nevertheless, from the standpoint of the company as an economic entity, dividends payable do represent a legal obligation like any other.



Rate this dividends payable definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: Key Rate Duration, EBITDA, phantom income, debt service coverage, inflation, liquidity ratio, wholly-owned subsidiary, limit order, Zero Cost Collar, FTSE, LIBOR, required rate of return, covered put, 401a, class C shares, diluted share, annual return, APR, stock market close, VIX, current ratio, labor relations, 144a, ex-dividend date, 1035 exchange, cancelled check, per diem, implied volatility, real GDP, minority interest, margin rate, command economy, ex-dividend, quality assurance, irrevocable trust, risk management, in escrow, reverse mortgage, retained earnings, deferred tax, dividends payable, average price per share, option premium, balance sheet, open position, 1031 exchange, stock split, FICO score, deferred revenue


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use