What are the differences between dividend and expense accounts?

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2026-03-05 18:10

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Dividend account is the account used to record money paid on stock such as common stock, this comes out of retained earnings.

Expense accounts are expenses that the company has to maintain operation and come out of Revenue, before dividends are calculated. A company may choose to not pay dividends on stock for a year (or so) if the company's retained earnings do not meat a certain amount.

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