10 October 2012
Dividend Reinvestment is shown as an income at Profit & Loss account. Is the treatment correct? And please explain the concept of Dividend Reinvestment
10 October 2012
Dividend reinvestment is a concept relating to mutual funds wherein the investor has chosen to invest the dividends delared on his units to be reinvested in the same fund as on the date of declaration.
Hence the accoutning treatment given is correct as it is a credit to P & L. But instead of bank credit and increase in assets side ,the investment amount will increase on assets side.
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