MANAGEMENT

Detailed explanation-1: -The term “dividend” usually refers to the distribution of the profit earned by the company to its shareholders (investors).

Detailed explanation-2: -Dividends are considered portfolio income, which is a type of passive income, but the IRS stipulates many rules around what can be considered passive or not.

Detailed explanation-3: -Dividends are payments a company makes to share profits with its stockholders. They’re paid on a regular basis, and they are one of the ways investors earn a return from investing in stocks. But not all stocks pay dividends.

Detailed explanation-4: -A dividend is a reward given to shareholders who have invested in a company’s equity, usually originating from the company’s net profits. Companies keep most profits as retained earnings, representing money to be used for ongoing and future business activities.

Detailed explanation-5: -Dividend received is an indirect income that is shown on the credit side of the profit & loss account.