Tag Archives: Cloud-Based accounting systems

How to record a dividend?

When the company is profitable, part of the earnings may return to the investor as a dividend. A Dividend is not an expense but a shareholder fund (equity), which the declared value will be less off from the Retained Earnings.

The accountant may debit the Retained Earnings and credit the Dividend Payable account, which is a Current Liabilities account type when a dividend has declared.

Instead of directly debiting the Retained Earnings account, the accountant may sometimes debit the Dividend account (Shareholder Fund/Equity account), which is a temporary account, and transfer out from Dividend to the Retained Earnings account later.

Below is a screenshot of the equity section of a Balance Sheet report:


Check with your accountant for more information about the dividend.

Specify the currency conversion rate (Exchange Rate)

Software: MoneyWorks accounting software

For purchases made from a GST register trader in foreign currencies, the supplier has to reflect the GST payable on the invoice in Singapore dollars with an approved exchange rate. You, the buyer, should claim input tax based on Singapore dollar amounts shown on the tax invoice instead of conversion based on your in-house exchange rate.

For example, your in-house exchange rate is 1SGD:0.7400USD, but received a Bill from a supplier at a rate of 1SGD:0.7431USD. Then, you should record the Bill (Purchase Invoice) with an exchange rate of 1SGD:0.7431USD instead of using the system rate 1SGD:0.7400USD.

Assuming the GST amount of a Purchase Invoice is US$700. It will be $$945.95 (700/0.7400) if recorded based on system exchange rare of 1SGD:0.7400USD and S$942.00 if the exchange rate has changed to 1SGD:0.7431USD.

As you can see from the above illustration when the exchange rate changed, the GST amount in Singapore dollar changed.

Click the exchange rate button on top of the purchase invoice to change the exchange rate of a transaction in MoneyWorks accounting software.

Change exchange rate

Then, uncheck the ‘Use system rate at posting time’ checkbox from the Currency Rate wizard and amend the exchange rate for the transaction.

You should check with your accountant or IRAS if you have doubt on GST transactions.


MoneyWorks accounting software update version 8.1.2

Cognito has released the update 8.1.2 for MoneyWorks accounting software. This update includes an updated GST F5 Guide (Form 5) for Customer Accounting for prescribed goods.

Prescribed goods refer to mobile phones, memory cards and off-the-shelf

Please visit Cognito website for a detailed Change History of version 8.1.2.