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Accounting & Tax vocabulary · Assets, Liabilities & Equity

Dividend

Meaning in accounting & tax, with examples

/ˈdɪvɪdend/nounCommon term

In accounting & tax, dividend means: A part of a company's profit that is paid out to its shareholders, usually in cash and in proportion to the shares they own.

In Turkish: kar payı, temettü

How it is used

Dividends are proposed, declared and paid out of retained earnings. They are a distribution to owners, not an expense, so they do not reduce profit.

Example sentences

  1. The general assembly approved a dividend of 2 lira per share.

  2. Dividends paid are usually shown under financing activities in the cash flow statement.

Common collocations

  • pay a dividend
  • declare a dividend
  • dividend per share
  • interim dividend
  • dividend payout
  • retained earningsThe total profits a company has kept over the years instead of paying them out to shareholders as dividends. They form part of equity.
  • equityThe owners' share in a business: what remains when all liabilities are subtracted from the assets. It includes paid-in capital and retained earnings.
  • withholding taxTax that the payer deducts from a payment, such as a salary, rent, dividend or freelance fee, and pays to the tax authority on behalf of the person being paid.
  • net incomeThe profit left after all expenses, interest and taxes have been deducted from revenue for a period. If the result is negative, it is a net loss.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Assets, Liabilities & Equity

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This page explains English vocabulary for learners. It is not financial advice.