Does Revenue Reserve Contain dividends ,I am confused .I got this that Retained Earnings is the Called the final amount which should be added at the end, after it has Already deducted the Dividends for the Year.
Because we treat them the way that the Financial Reporting Standards tell us to treat them 🙂
The reason is because dividends go to the owners of the company (and can always be cancelled), whereas other liabilities (whether contingent or not) are liabilities to those external to the company.
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Does Revenue Reserve Contain dividends ,I am confused .I got this that Retained Earnings is the Called the final amount which should be added at the end, after it has Already deducted the Dividends for the Year.
Retained earnings is a revenue reserve.
It increases each year by the profits less the dividends i.e. the amount retained.
Sir, why are dividends not agreeed upon not treated in the same way as contingent liabilities?
Because we treat them the way that the Financial Reporting Standards tell us to treat them 🙂
The reason is because dividends go to the owners of the company (and can always be cancelled), whereas other liabilities (whether contingent or not) are liabilities to those external to the company.