Business: accounting for dividends

[Graham Leggett]

Maf. King wrote:

>> I am needing some pointers on how to account for dividends within
>> gnucash, ie when closing off the previous year, declaring a dividend and
>> starting the next year.
>>
>> Right now I created an equity account called "dividends" with
>> transactions in it going to the loan accounts of the people that should
>> be paid the dividends.
>>
>> The trouble is when I run a balance sheet for the following year, the
>> dividends still show up on the balance sheet from the previous year, and
>> the retained earnings figure is incorrect.
>>
>> The gnucash docs don't seem to include any information on what needs to
>> be done to close off a year, ideally I don't want to open a whole new
>> gnucash file for the new year if I can possibly avoid it as it makes
>> data mining very difficult.
>>
>> Regards,
>> Graham
>> --
> 
> Isn't a didvidend payment recorded as a (post-tax) expense?
> On the grounds that it is money being taken out of the business.

So in other words I should register it as an expense account, and not an 
equity account?

Regards,
Graham
--
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