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Which of the following items should appear in a company’s statement of changes in equity?
1 Preference dividends paid
2 Interest payable on loans
3 Profit for the financial year before tax
4 Bonus issue of shares
A 1, 2 and 4only
B 2 and 3 only
C 3 and 4 only
D 4 only
Correct answer is D, but how about “preference dividen paid”? If it is irredeemable preference share dividend it has to be included in SOCIE. But they didn’t include it as correct answer, why?
Thanks in advance 🙂Two reasons – the silly reason is that 1 and 4 is not an available option.
More importantly, preference dividends do not automatically appear in the SOCIE – it is as you have written, they only appear if they are irredeemable preference shares. Therefore the answer is correct.
Choosing 1 would imply that all preference dividends appear on the SOCIE, which is not true.
Or if the question use “may” instead of “should” is it possible to choose 1,4?
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