Cash Dividend
Accounting glossary · Understand, connect, apply
A cash dividend is a distribution of cash by a corporation to shareholders under an authorized dividend arrangement.
Example
A dividend of 0.50 per share on 10,000 eligible shares requires 5,000 cash.
Remember the difference
A dividend is a distribution to owners, not an operating expense. A declared cash dividend generally creates a payable.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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