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bojopr
March 12, 2019
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How do I enter dividends I take from the company

  • March 12, 2019
  • 4 replies
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I take bi-weekly withdrawals from my company account. My previous bookkeeper tracked them as shareholder loans I believe (I was told we don't use dividends anymore?). How do I enter these withdrawals into Quickbooks desktop (Canada)? I'm looking to match up the withdrawals in my bank feed.

    Best answer by

    Hello bojopr,

    You would create an equity account in your Chart of Accounts called Dividends Paid. Every time you allocate the transaction you would choose this account. This would also be an Out of Scope tax item as th default tax setting. 

    Let me know if you need step by step instructions to set up the account.

    4 replies

    A
    Anonymous
    Answer
    March 12, 2019

    Hello bojopr,

    You would create an equity account in your Chart of Accounts called Dividends Paid. Every time you allocate the transaction you would choose this account. This would also be an Out of Scope tax item as th default tax setting. 

    Let me know if you need step by step instructions to set up the account.

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      bojoprAuthor
      March 12, 2019
      Great! So, there is already a Dividends Paid account set-up. So, to enter dividends I take, do I create a bill?
        N
        NEVER
        March 12, 2019

        No, you would use the Write Cheques function to yourself and select the Dividends Paid account under the Expense tab on the bottom section of the cheque.

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          bojoprAuthor
          March 12, 2019
          Thank you :)
            N
            NEVER
            March 12, 2019
            Luke: You would create an Equity type account in your COA called Dividends Paid. Then, each time you take a Dividend, use the Write Checks function; Payee is you; select the Dividends Paid account under the Expense tab of the check and enter the amount. Nothing else to do. If you regularly draw dididends, consider Memorizing the check.
              N
              NEVER
              March 12, 2019

              @Andy11.hall - I don't understand what you are trying to accomplish: A Dividend is usually paid only at the end of your fiscal year - once you know how much Profit your business realized. Some businesses, however, pay dividends at regular intervals based on the assumption that the business will generate X amount of profit in that fiscal year. If you are taking money out of your business by paying yourself a Dividend, The transaction to use would be Write Cheques>payable to yourself>account: either Dividends Paid or Owners Withdrawals - Equity type. The transaction would reduce both your Bank account and your Equity account. 

              If your intent is to increase the value (Equity) of your business and you are moving funds from your own personal bank account to your business, the transaction to use is: Bank Deposit>Received From: yourself>From Account: Owners Contributions(Equity type)>complete the rest of the details as required. This transaction increases the business bank account as well as the Equity account. 

              If by current account you mean the Business bank account, a JE to move funds to an Equity account is incorrect. A positive balance in the Bank account IS equity and reducing your bank balance will not increase the value of your business.

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                erikyuzwa
                March 12, 2019
                Do these "Equity" Detail Types keep changing? I don't see anything using the term "Dividends" or "Owners Withdrawl" now in April 2018. Any ideas? I'm not an accountant by trade, so I need exact terms or I'm lost. If this has been re-classified, what is it now?
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