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Paying Out a corporate dividend - how?

Posted By Golden Barstewart over 16 years ago

Hello all,

I have small small business corporation and want to pay out a dividend to shareholders. How do I do that in Simply Accounting (my version is 2007)?

What I did was set up a group account 3525 in the Retained Earnings section, then issued a cheque to the shareholder as a vendor, thereby crediting the bank account and debiting the account 3525. This results in the total retained earnings increasing by the amount of the dividend. Is this correct???

Your help would be appreciated!

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FormerMember over 16 years ago

Hi there: Was your retained earnings account in debit balance before you issued the dividend? If so, it was actually a deficit and in that case issuing the dividend would indeed increase the deficit balance. If it was a credit balance to start with, then the balance should not increase if you post a debit to that account.
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FormerMember over 16 years ago

Hi there: Was your retained earnings account in debit balance before you issued the dividend? If so, it was actually a deficit and in that case issuing the dividend would indeed increase the deficit balance. If it was a credit balance to start with, then the balance should not increase if you post a debit to that account.
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Paying Out a corporate dividend - how?

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