Team Lead
7558 Points
Joined November 2011
Please note that the dividend payable to shareholder's is the liability of the company. It is requried to be provided in the P&L account on the last day of Mar31 and the liability to be shown as Proposed Dividend in the B/S which becomes Nil when the dividend is actually paid by the company when approved by the shareholders in the AGM.
for providing the dividend as of 31st Mar the entry would be as follows:
dividend Dr
To-Proposed Dividend
the payment entry in the subsequent eyar would be as follows:
Proposed Div A/c dr
To- Bank A/c
As dividned is not a tax deductible expense it is required to be shown as an appropriation from profits after providing for tax.