If Justin's proposal refers to > If we bring in a Dividend type account under Equity we can debit dividend > declarations to this account. We don't have to credit this account by the > way. The account will be in minus with red font as in current version. The > balance in this account will be transferred to net account resulting in the > proper 'Retained Earnings'. > > Eg, total net income = $50,000 > Dividends are declared = $25,000 to be paid to shareholders > Dividend Declared account in Equity will show -$25,000 since it is only > debited. > Retained Earnings = Net income + Dividend Declared = 50000+ (-20000) = 30000
There's no reason to challenge it. Nothing in GnuCash prevents you from doing that. Regards, John Ralls > On Apr 16, 2019, at 4:59 PM, Phil Diacono <satp...@gmail.com> wrote: > > I agree with Justin. Other than "this is how it works" or "here's a > workaround", > I don't believe I've seen an argument challenging his proposal. Can I > encourage you to consider this approach for a future release? > > Am I correct in thinking that the other category that drains retained > earnings > is capital expenditure? > > Phil Diacono > > - >> Dividends are a decrease in equity and can't be recorded in an 'Expense' >> type account (although that's the current workaround and technically >> wrong). Therefore what I suggest is to create a dividend account type >> under >> equity (equity currently has only 1 type of account) which can be used to >> record dividend declarations. The value of this account can then be >> adjusted from total income. This will give us the real 'Retained >> Earnings'. >> >> Note that: The corresponding journal entry for recording in dividend >> declaration account is 'dividend payable' (which is a liability account >> created by user). To record a dividend paid, a second record is created in >> 'dividend payable' against the journal 'current account' or 'cash >> account'. >> >> Regards, >> Justin Mathew > > > > > -- > Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-Dev-f1435356.html > _______________________________________________ > gnucash-devel mailing list > gnucash-devel@gnucash.org > https://lists.gnucash.org/mailman/listinfo/gnucash-devel _______________________________________________ gnucash-devel mailing list gnucash-devel@gnucash.org https://lists.gnucash.org/mailman/listinfo/gnucash-devel
