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Dividend

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Dividend

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • July 25, 2019 at 2:38 pm #524885
    ikmughal28
    Participant
    • Topics: 66
    • Replies: 62
    • ☆☆

    Hi
    I have a general question that if profit is not equal to cash then why cash dividend is paid out of profit/retained earnings? shouldn’t it be paid from cash directly?

    July 25, 2019 at 5:52 pm #524904
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54805
    • ☆☆☆☆☆

    You should remember from Paper FA (was F3) that the double entry when a dividend is paid is Credit Cash and Debit Retained earnings.

    They need to have made profits (and therefore have retained earnings) in order to pay dividends.

    July 25, 2019 at 9:42 pm #524922
    ikmughal28
    Participant
    • Topics: 66
    • Replies: 62
    • ☆☆

    Cleared Thanks

    July 26, 2019 at 9:48 am #524948
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54805
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Dividend’ is closed to new replies.

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