Hi All, this is my first post here so I'm hoping someone may be able to guide me a little. I'm quite new to QuickBooks and indeed to managing my accounting as a whole, although I'm a fair way down the line. However, I'm still struggling to get to grips with how to deal with dividends. I've gone down the route of the advice I found online referring to creating journal entries.
As such I created a Retained Earnings account to debit then a Provision for Dividend account (Current Liability) to match it to. Those accounts remain.
My basic understanding from this research is that a dividend should be a debit to Retained Earnings and a Credit to Current Liabilities..?
However, actually, if my thought process is right, I don't need to delve into journal entries as I'm simply trying to allocate the payment out of the account that shows up in the Banking section as an outgoing transaction?
In the Banking section you can only select the outgoing dividend payment as an Expense, Cheque or Transfer of course. Clearly its an expense, and I would imagine it should be allocated to the category Provision for Dividends ( Current Liabilities) and classed as No VAT, but then how do I link that outgoing payment to the Retained Earnings account? Or do I not need to as its already a physical payment out, so no need to link it as it's effectively therefore physically deducted from Retained Earnings already.
This may be an absolutely stupid question but I have been trying to get a fluent understanding of it on my own now, on and off, for a few weeks, and nada!!
Any guidance would be absolutely 100% appreciated. THANKS!
