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Are dividend payments shown as an expense on the income statement?

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posted Jul 5 by Shubham Rajput

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1 Answer

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A corporation's dividends are not an expense and therefore will not appear on its income statement. Cash dividends are a distribution of part of a corporation's earnings that are being paid to its stockholders.

When a corporation has preferred stock, the dividends on preferred stock are deducted from a corporation's net income in order to arrive at earnings available for common stock. Earnings available for common stock is reported on the income statement. It is also used to calculate the common stock's earnings per share. The earnings per share figure is reported on the income statement when the corporation's stock is publicly traded.

answer Jul 7 by Chetan Hindu
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