Tag Archives: Dividend

How to record a dividend issued in QuickBooks?

I had a customer who asked me this question, 'How to record a dividend in QuickBooks?’

This is an accounting question; it is regarding the method used in your accounting process. 

I had seen user using these methods; which you may like to consider:


Dividend as an Other Expense account in Profit & Loss Report

2009_1030_01_diviexp_pnl Some users create a Dividend account (as an Other Expenses type of account) and a Provision for Dividend account (as an Other Current Liability type of account). Then, they passed a journal to debiting the Dividend account and crediting to the Provision for Dividend account.

Example:

Assume that the company is going to issue $400,000.00 as a dividend for the year. The double entry will be debiting the Dividend account $400,000.00 and crediting the Provision for Dividend account $400,000.00.

Some user may feel that presenting Dividend as a Profit & Loss account may not be right; they may prefer to deduct it from the Retained Earnings account.

How to record the dividend directly into Retained Earnings account?


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