How to Journalize Dividend Receipts

How to Journalize Dividend Receipts
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Recording money received, including dividend receipts, is an important part of managing your finances. Dividend receipts are payments to shareholders from a company's profits. Shareholders have purchased stock in a company. Most dividends are paid quarterly, but depending on the company, payments may be more or less frequent.

Go to the General Journal.

Debit “Cash” for the amount of the dividend receipts. Cash is an asset account and is increased with a debit. Debits are always on the left side of the balance sheet.

Credit “Dividend Revenue” for the amount of the dividend receipts. Dividend Revenue is a revenue account and is increased with a credit. Credits are always on the right side of the balance sheet.

Tips

  • Date dividend receipts the day they are received.

Warnings

  • Neglecting to record dividend receipts could cause your books to be out of balance at the end of the quarter or fiscal year.