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Question
Justify the following statement.
Dividend is paid out of profits of the company.
Solution
- Shareholders invest in the company’s shares with aim of earning returns out of the profits of the company.
- The shareholders get dividends as a return on their investment.
- The shareholder being the owner of the company is entitled to a share in the company’s profits.
- A dividend is a share of the distributable profits of the company.
- Hence, the dividend is paid out of the profits of the company.
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RELATED QUESTIONS
State whether the following statement is true or false.
Dividend cannot be paid out of capital.
Complete the sentence.
Dividend cannot be paid out of ______.
Select the suitable option for the following.
____________ Dividend declared but not paid/claimed
Correct the underlined word and rewrite the following sentence.
Dividend is paid to creditors.
Correct the underlined word and rewrite the following sentence.
The Dividend to be paid should be transferred to Dividend A/c within 30 days of its declaration.
Arrange in Proper Order:
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Arrange in Proper Order:
- Decision on Rate of Dividend
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- Payment of Dividend.
Explain the following term/concept.
Unpaid Dividend
Justify the following statement.
Unpaid dividend cannot be used by the company.
Correct the underlined word and rewrite the following sentence.
Dividend is paid to creditors.
Answer in brief.
Discuss the rules governing unpaid and unclaimed dividend.
Unpaid/unclaimed dividends shall be transferred to Investor Education and Protection fund on expiry of ______ years.
Justify the following statement.
Unpaid/Unclaimed Dividend is governed by some rules.
