Final answer:
No journal entry is required on the date of record for dividend distribution as it simply marks when a company records who is to receive dividends. An entry is made on the declaration date and the payment date instead.
Step-by-step explanation:
The statement that no journal entry is required on the date of record is correct. In the context of dividend distribution by a company, there are typically three important dates: the declaration date, the date of record, and the payment date. On the declaration date, a journal entry is made to debit retained earnings and credit dividends payable.
However, on the date of record, the company does not need to make any journal entry. This date is simply when the company determines which shareholders are eligible to receive dividends. It is the dividends payable account that was credited on the declaration date that reflects the company's liability to pay the dividends.
Finally, on the payment date, the company will make a journal entry to debit dividends payable and credit cash, reflecting the actual payment of the dividend. Understanding the distinction between these dates is important for accurate financial reporting and maintaining shareholder records.