Dividends or Owner's distributions are earnings that an owner withdraws from a business based on the profit that the company has generated. Business owners may withdraw profits via distributions for personal use, or they may leave profit income in business accounts where it can be used as working capital. The term ‘Dividend’ is used for Corporation level business, and the term ‘Distributions’ is usually refers LLC, partnership, trusts and estates companies.
Here are the steps to enter Dividends:
Click the ‘Add Dividends’ button
Name: Enter Dividend name(Description) and Dividend amount:
Dividend Amount: Enter the withdrawal amount and the date when you withdraw or distribute?
How dividends reflects in various financial statements:
See how the dividends reflects in all three main financial statements Profit & Loss statement, Balance Sheet and Cash-flow Statement as follow:
Where does the Dividends appear in Profit & Loss Statement?
In general Dividend is not a part of Profit & Loss statement, But for reviewing purpose we have calculated ‘retained earning’ and listed entry in summary section.
Where does the Dividends appear in Balance Sheet?
Dividends is used to calculate retained earnings, The Retained Earning Values appear in balance sheets are closing values. The dividend values are carries forward from the month when it was paid.
Where does the Dividends appear in Cash-flow Statement?
In the Cash Flow, There is a separate row for ‘Dividends & Distributions’ under the section ‘Net Cash from From Financing’.