375 Dividends

Owner’s Equity

Net Worth

Synopsis

Account 375 is established to record the amount of Dividends paid or payable to stockholders as declared by the Board of Directors. This account is for corporations only.

Debits

Credits

Dividends paid during the current year

Balance in the account at the end of the accounting year

Example 1

Record the accrual of declared dividends totaling $500,000.

Journal: General Journal

Entry:		Debit	Credit
Account 375	Dividends	$500,000
Account 331	Other Payables		$500,000

Example 2

Record the transfer of dividends account to retained earnings at the end of the year.

Journal: General Journal

Entry:		Debit	Credit
Account 370	Retained Earnings	$500,000
Account 375	Dividends		$500,000