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RayW
Level 3

What is the workflow for paying dividends from a limited company?

Dividends are paid into a liability account called 'Dividends Payable'. What is the process for clearing down this account when dividends are paid?
4 REPLIES 4
TaliaI
QuickBooks Team

What is the workflow for paying dividends from a limited company?

Hello RayW,

 

Welcome to the Community - thank you for your question!

 

When dividends are paid, you post the expense to the liability account - this will lower the remaining balance.

 

Thanks,

 

Talia

RayW
Level 3

What is the workflow for paying dividends from a limited company?

HI Talial

Thanks for the quick reply.

The dividends are already being posted to the liability account called 'Dividends Payable'. But that amount still shows on the balance sheet under 'Current Liabilities'. Shouldn't current liabilities be cleared down once they are paid?

TaliaI
QuickBooks Team

What is the workflow for paying dividends from a limited company?

Hello,

 

That is correct, the balance should reduce as the expenses are posted. Do you have access to Facebook or Twitter so you can private message us your email address and a screenshot of your balance sheet?

 

Thanks,

 

Talia

RayW
Level 3

What is the workflow for paying dividends from a limited company?

Hi Talial

I've just sent a pdf file of the balance sheet as it currently is in QuickBooks. I've just realised as well that the balance on dividends payable is a negative number. So, it seems we have got something very wrong.

 

Regards

Ray