Accounting Dictionary

Pro Rata

Pro Rata means proportionate allocation.

John owns 60% of the company and Joan owns 40%. The company has $10,000 to send out as dividends. John will receive 60% of the dividends or $6000 because he owns 60% of the company. Joan will receive 40% of the dividends or $4000 because she owns 40% of the company. They distributed the dividends pro rata.

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