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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Dividends
Are dividends given to shareholders who still owe the company on share capital or dividends when provided for are used to cover their debts ?
This is a valid question … in theory! I am not aware of ANY situation where a shareholder still owes money in respect of the acquisition of shares by that shareholder
However, it could be the case that a company has issued shares that are not yet fully called-up – so we have a situation where shares are issued and partly paid
In that situation, it would be possible for the company to declare a dividend on those partly paid shares but I imagine that the dividend will in fact be paid to those shareholders of the partly paid shares
In the context of an exam question … I believe that the chances of your question being asked would fall into any definition of ‘remote’
OK?