Business: accounting for dividends
Maf. King
maf at chilwell.net
Wed Oct 8 16:28:27 EDT 2008
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
> --
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