Dividend Payable

An accrued dividend—also known as dividends payable—is dividends on a common stock that have been declared by a company but have not yet been paid to shareholders. A company will book its accrued dividends as a balance sheet liability from the declaration date until the dividend is paid to shareholders. The journal entry to record the declaration of the cash dividends involves a decrease (debit) to Retained Earnings (a stockholders’ equity account) and an increase (credit) to Cash Dividends Payable (a liability account).