Journal entry of dividend declaration and its payment

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

06 December 2016 Dear Experts,
Pls tell me the journal entry of dividend declaration and dividend payment?

Regards
Ashish

Nischit Sanghavi

Nischit Sanghavi (Expert)
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12 December 2016 1. When dividend is proposed by company out of net profit.

Profit and Loss Appropriation Account Debit

Proposed Dividend Account Credit

2. When Proposed dividend is paid by Company

Proposed Dividend Account Debit

Bank Account Credit

3. When Dividend is Declared Out of Retained Earning

Retained Earning Account Debit

Dividend Account Credit

4. When Such Dividend is Paid

Dividend Account Debit

Bank Account Credit

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2016 Dear sir
Pls clarify what is profit & Loss appropriation account and in which group it will go....

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Nischit Sanghavi

Nischit Sanghavi (Expert)
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04 June 2017 The main intention of preparing aprofit and loss appropriation accountis to show the distribution of profitsamong the partners. It is debited with interest on capital and remuneration to partners and credited with the netprofits b/d from the profit and loss account and interest on drawings.