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A business paid $40 in dividends. Show how to record the transaction to the T-accounts by completing the following sentence. Dividends would be (debited/credited) on the (left/right) side of the T-account. and Cash would be (debited/credited) on the (left/right) side of the T-account.

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Answer:

Dividends would be debited on the left side of the T-account and Cash would be credited on the right side of the T-account.

Explanation:

The T-accounts is a system of accounting used to record transactions in debits and credits. Accounts are recognized based on class- Assets and expenses are usually debit while revenue and liabilities are credit balances.

If dividend was paid the entries required are debit to dividends credits to cash.

Dividends would be debited on the left side of the T-account and Cash would be credited on the right side of the T-account.