I have small limited company. When do I have to record dividends?I know that I can pay myself dividends out of profits after corporation tax. If I pay myself dividends after I submitted corporation tax return, when will i have to record them?In an accounting period when dividends were paid or in previous year (for which corporation tax return was made)when profit was made showing as declared dividends in P&L and liability in B/S?Any help?
If you have declared a dividend in the previous year eg £10k and that is shown as a liability and you pay it in the current year then the journal to record is
Dr Dividend Liabilty £10k
Cr Bank £10k
Basically by making the payment you are extinguishing the liabilty.
