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|Original Message Added : 8 Jan 2009|
Please could you advise how I would record dividend payments in my accounts.
|Reply : 9 Jan 2009|
Dividends are recorded in the accounts after profit and corporation tax, and you record simply the amounts actually paid out by the company. Let me know if i can be of any further assistance
|Reply : 11 Feb 2009|
The actual payment of the dividend is recorded in the accounts as a payment with the opposite entry reducing the retained after tax profit.
Shareholders should also receive a dividend tax credit voiucher which you can obtain free from this page on the DIY Accounting website with more information about dividend tax credits
|Reply : 26 Apr 2009|
I agree with Tim and Terry,before you know the actual profit after tax, the money you took out from the company during the related financial year is basically treated as a loan.
|Reply : 8 Jul 2009|
As Tim says - Dividend is not a business expenses but a distribution of available profits the company has made. So in terms of recording:
-Ensure dividend vouchers are completed at the time dividend are paid out.
- In your accounts if the dividend is paid out - This will be a deduction of the cash balance and a deduction of the profits that are available to the company.
- Also there some very good plain English books available on the market explaining how to do this and lots of other accounting entries. They will be far clearer than my explanation. One of the authors is Frank Wood, whose books on book-keeping and accounting are very easy to understand for a lay person.