You are correct in that you do not use the User-Defined Expense since those are for employees and you are not an employee.

Dividends needs to be declared first by lawyer and usually this is discussed between yourself and your accountant who then passes the instruction to lawyer to declare the dividends. You should have an account under Current Liabilities called Shareholder's Withdrawals. If not then create one and use that account. instead. Your accountant can then make an adjustment to divert some or all into dividends at year-end depending on the financial situation at that time.

You are correct in that you do not use the User-Defined Expense since those are for employees and you are not an employee.

Dividends needs to be declared first by lawyer and usually this is discussed between yourself and your accountant who then passes the instruction to lawyer to declare the dividends. You should have an account under Current Liabilities called Shareholder's Withdrawals. If not then create one and use that account. instead. Your accountant can then make an adjustment to divert some or all into dividends at year-end depending on the financial situation at that time.

OK. Make sense.

Without going into details, suffice it to say I do not have an accountant right now. Therein lies a lot of my problems as I am doing everything myself.

Until such time as I do have an accountant, I am entering all transactions. In this case, I did a sale for ex: $1,000.00, net profit realized is $200.00. I want to take out that $200.00 and have it registered as being paid to myself.

Question is, how do I record that transaction in SAGE?

Hi MarcDu,

You may want to follow the link below for how to record a dividend payment to stockholders as you mention that  your company is an Corporation.

How do you record a dividend payment to stockholders?

http://www.accountingcoach.com/blog/recording-dividend-payment

Hope this helps

Thank-you Keith. That helps. I also like  the site's name. If it holds true to its name, it will help me quite a bit.

Cheers,

Marc

If I debit the account "retained earnings (#3560)" I have listed in SAGE, does it matter if it has the mention "Previous Year" attached to it?

I mention this because this payment to myself is being done in my current fiscal year.

Please bear in mind that I'm learning accounting as I go here and all this is new to me.

Cheers,

Marc

Hi Marcdu,

If any suggestions provided in this thread are able to help you resolving your issue, would you please click the 'Yes' button to the question - 'Did this answer the question?'  The thread will be marked as answered, which will benefit other users who have the same issue.  Thanks a lot.

Dividends are declared based on previous years - not current year.You are best to still create and use a 2000 liability account called Shareholder Draw. That can later be cleared to a dividend payable account when the dividends are declared by lawyer at fiscal year end which at that point will show in the equity account that is related to dividends. You cannot post to a Retained Earnings account as it is not a postable account. When seeking accounting information on the internet be sure the website is for Canadian content as Canada has different requirements/rules than USA or other countries.

You may wish to consult an experienced bookkeeper in your area to oversee your work periodically to ensure correct postings.

For now I would suggest you enter in A/P purchase module as a pay now under your name and code to a 2000 account called Shareholder's Draw.

Sounds good. I appreciate ther suggestion SmithCo

SmithCo, the 2000 account you suggest I create, should it be in current liabilities or long term liabilities? Long term, right?

That would be current liabilities, as you would need to clear that account before closing your year, by assigning it to either Dividends, wages, or Loan. (loans have other implications).

Thanks for the reply JSB. Much appreciated.

Cheers,

Marc