30121721, 10:51 AM How De Dividends Affect the Balance Sheet? Advertisement Cash Dividends on the Balance Sheet Cash dividends affect twoy--~-~ == th= belnnnn chants tha -=-b =< shareholders! equity accounts. Investors rount for dividends that have been paid. However, > the actual payment, the company records a liabilit, ble account. Fe Try the Investopedia Stock Simulator New to investing? Learn how to trade in real time on our virtual stock simulator. Our plat helps teach you the right strategies for building and maintaining wealth. LEARN MORE Afterthe dividends are paid, the dividend payable is reversed and is no longer present on the liability side of the balance sheet. When the dividends are paid, the effect on the balance sheet is a decrease in the company's retained earnings and its cash balance. In other words, retained earnings and cash are reduced by the total value of the dividend. Acvertisement hitps:wwwinvestopedia.com/asklanswersi0904 1Sthow-do-dvidends-affect-nalance-sheet. asp