Accounting entries for dividends of available-for-sale financial assets
When declaring dividends
Debit: Dividends receivable
Loan: investment income
When the dividend is actually received,
Debit: bank deposit
Credit: Dividends receivable
What is the return on investment?
Investment income refers to the income obtained by enterprises from foreign investment (the losses incurred are negative), such as dividend income, bond interest income, profits shared by joint ventures with other units, etc. Investment refers to the economic behavior of a specific economic entity to invest a sufficient amount of funds or physical currency equivalents into the subject matter of a certain field in order to obtain income or capital appreciation in the foreseeable future. Investment income is a profit and loss account, and the profit and loss account reduces debits and increases credits.
What is dividend receivable?
Dividends receivable refer to cash dividends payable for equity investment of small enterprises, interest payable for debt investment and profits receivable from other units. Including cash dividends declared but not yet received and cash dividends or profits due to foreign investment of enterprises, but excluding stock dividends receivable. In order to reflect and supervise the increase and decrease of dividends receivable and its balance, enterprises should set up the subject of "dividends receivable". The debit of the "Dividends Receivable" account registers the increase of dividends receivable, and the cash dividends or profits received by the lender are generally in the debit, reflecting the cash dividends or profits that the enterprise has not yet received.