if a company proposes and declares dividend,say 10 lakh,then is it compulsory for company to pay entire amount or can they pay lesser amount like 9 lakh to shareholders.Because in a practical sumwhen i made proposed dividend account then ,opening proposed dividend is 10 lakh,closing proposed dividend is 12 lakh,company paid dividend 9 lakh and in P/L the bal fig came 11 lakh.So according to question it means last yr proposed dividend was 10 lakh,but company paid 9 lakh only.How is it possible?
Please help.Ipcc student.
Yes when a company proposes and then declares dividend of say 10 lacs,then will have to pay 10 lacs as declared dividend is a liability
Coming to the question,if company has only proposed ₹10 lac dividend but didn't declare,then it's upto the board of directors discretion how much they wish to declare.If they declare 9lacs then it becomes a liability from provision.Will have to shell out
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