when an enterprise accepts the capital invested by investors in the course of its operation, it needs to pay dividends to shareholders at the end of the year, which generally involves dividend payable subjects and profit distribution subjects. How to do the specific accounting treatment?

accounting entries for dividend distribution to shareholders

1. The shareholders' meeting announced the distribution of cash dividends,

Borrowing: profit distribution-cash dividends payable

Lending: dividend payable

2. Paying the declared cash dividends,

Borrowing: dividend payable

Lending: bank deposits/cash on hand

What is dividend payable?

dividend payable refers to the profits payable by enterprises to investors, including the investment profits payable to the state, other units and individuals. For cooperative projects between enterprises and other units or individuals, according to the agreement or contract, the joint fee industry that should pay profits can also be included in dividend payable.

What is the profit distribution?

profit distribution refers to the distribution between the state and enterprises, enterprises and enterprises in accordance with the provisions of the total profits realized by enterprises and the profits obtained from joint ventures within a certain period (usually annual). According to the relevant provisions of the state, the articles of association of the enterprise and the resolutions of investors, the enterprise distributes the profits available for distribution in the current year, and accounts for the distribution of profits (or compensation for losses) and the balance after distribution (or compensation) over the years.

what is a bank deposit?

Bank deposit is the money stored in the bank, which is an integral part of monetary funds. According to the provisions of China's cash management system, every enterprise must open a deposit account with the People's Bank of China or a specialized bank to handle deposit, withdrawal and transfer settlement. Except for a small amount of cash within the prescribed limit, the monetary funds of the enterprise must be deposited in the bank. The bank deposits of the enterprise mainly include: settlement account deposits, letter of credit deposits, foreign deposits and so on.