Page 74 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 4: Final Accounts

The amount of dividend received in cash is 6,500. Notes
The journal entry for the first transaction for the receipt of the dividend 6,500:
Mar 31 Cash A/c Dr 6,500
To Dividend A/c 6,500
(Being the amount of dividend received)

The journal entry for the dividend outstanding 3,500:

Mar 31 Dividend O/s Dr 3,500
To Dividend A/c 3,500
(Being the dividend outstanding treated as an asset)

How many number of accounts involved in the process of a transaction?
1. Cash A/c

2. Dividend O/s A/c
3. Dividend A/c
Dr Cash A/c Cr

Date Particulars Date Particulars
Mar 31 To Dividend 6,500 By Balance c/d 6,500
6,500
To balance c/d 6,500

Dr Dividend O/s A/c Cr
Date Particulars Date Particulars
Mar 31 To Dividend 3,500 Mar 31 By Balance c/d 3,500
3,500
To balance c/d 3,500

Dr Dividend A/c Cr
Date Particulars Date Particulars
Mar 31 To Balance c/d 10,000 Mar 31 By cash 6,500
By Dividend O/s 3,500
10,000 10,000
By balance c/d 10,000

How is the adjustment entry of outstanding of dividend income effected in the Profit &
Loss A/c and Balance sheet?
Dr Profit and Loss account for the year ended………….. Cr

By Dividend 6,500
Add:O/s Dividend XYZ Ltd 3,500
Total amount of dividend 10,000

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