Business: accounting for dividends

[Maf. King]

On Wednesday 08 October 2008 21:23:15 you wrote:
> Maf. King wrote:
> > Isn't a didvidend payment recorded as a (post-tax) expense?
> > On the grounds that it is money being taken out of the business.
>
> I just tried to move the dividend account to an expense account to see
> what would happen, and the retained earnings account is still way off.

Did you change the account type to Expense rather than Equity (edit account 
from tree-view window) - might make a difference to the report.

>
> Does anyone have a description of exactly how retained earnings is
> calculated?
>

AFAIK, GC derives the figure of Retained Earings, ie "that sum which is 
required to make the accounting equation work" 

HTH,
Maf.


> Regards,
> Graham
> --