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Under which category do i key this under
Shasha1234
Member Posts: 3
Hi guys, Im still new at accounting so i need your help. Lets say I have 2,000 dollars of my business money invested in an outside organization. I get dividens years on this investment.
My question is,
1) Underwhich category do i place this money which I have invested. Its not really an income , its business money just placed somewhere and I can withdraw it from the organization anytime I want. However, I try not too, to allow the investment to mature
2) When I get dividens for the invesment, the money goes into the total investmet and not my business bank account. Again, what category do I place this under.
My general confusion is that this isnt an income, its just profit from my business being place in another location, so it does not fall under the "cash in hand category/bank account"
My question is,
1) Underwhich category do i place this money which I have invested. Its not really an income , its business money just placed somewhere and I can withdraw it from the organization anytime I want. However, I try not too, to allow the investment to mature
2) When I get dividens for the invesment, the money goes into the total investmet and not my business bank account. Again, what category do I place this under.
My general confusion is that this isnt an income, its just profit from my business being place in another location, so it does not fall under the "cash in hand category/bank account"
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@Shasha1234,
I would create a short term asset account called Investments. Cash coming out of your bank account would be categorized there. As for the dividends, if they are reinvested and not paid to you then you would need to make a journal entry. Debit the Investment and credit Dividend Income You will probably need to create an income account called Dividend Income. Hope that helps.