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    enigma101's Avatar
    enigma101 Posts: 5, Reputation: 1
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    #1

    Aug 31, 2009, 12:39 PM
    Financial leverage ratio & Dividends Payable - ?
    What is a financial leverage ratio? If dividends are distributed to shareholders’, is it true the amount would be entered as a Dividend Payables and must be paid back?

    Thank you!
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    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Sep 1, 2009, 12:31 AM

    Leverage ratios:
    Leverage Ratio

    As for dividends...
    At the time cash dividends are declared it's a debit to either Cash Dividends or Retained Earnings, and a credit to Dividends Payable.

    When the dividends are actually paid later (not "paid back" - you didn't borrow them), then it's a debit to the payable and a credit to cash.
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