FUND FLOW STATMENT

Interim divident is certain liability to be paid by company. That is of course application of fund.

Interim dividend IS NOT LOSS FOR THE COMPANY.... So, it is not shown in P&L account as other expenses... FIRST PART OF P&L A/C

Its a sure liability of company, which is paid out of company's available funds... its the SECOND PART OF P&L A/C

While, the annual dividend is APPROPRIATION TO THE PROFITS, i.e the third part of PROFIT & LOSS ACCOUNT...

ya thank you sir......

AS IT IS LIABILITY OF COMPANY TO BE PAID IT IS DEBITED TO P&L ADJUSTMENT ACCOUNT.

BUT IN THE SAME WAY IT IS SHOWN AS APPLICATION TOO ......

DOESNT IT MAKES DOUBLE EFFECT 

Interim divident is liability of company (Due on date when declared) and not exenses and it comes below the line in P/L Aprropriation account. so it does not effected in two ways.