If its written that company has policy of paying 40% of PAT as dividends.
So here 40% of PAT will be paid as dividends (i.e cash will be credited) 60% of PAT will be added as retained earnings in reserves (i.e Reserves will be credited) Right? But what would be debited here?
Debits and credits are of no relevance whatsoever for Paper FM. If you want to know them then you need to watch my Paper F3 lectures (where it is relevant).
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