Is a nonliquidating dividend recorded as dividend income?
Nonliquidating dividends are normal dividends that should be recognized in net income. Nonliquidating dividends are not distributions in excess of that particular shareholders share of retained earnings.
Remember that liquidating dividends are not reported as dividend income. Rather liquidating dividends are recorded as a reduction to the investment account on the balance sheet since the company is returning capital to its shareholders.
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