CAF-1 · Chapter 8 · Question 2 of 15
How should a final dividend declared just after the year-end be presented in the financial statements for that year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Disclosed only in the notes to the financial statements.
Explanation
A dividend declared after the reporting period is a non-adjusting event and is only disclosed in the notes; it is not recognized as a liability or deducted from equity at year-end.
More Statement of Changes in Equity MCQs
- Q4Which of the following causes an overall change in equity during a period?
- Q5An interim dividend of Rs. 15 million is paid during the financial year. How is this recorded in the financial statements?
- Q6What is the primary purpose of a 'Dividend Equalization Reserve'?
- Q7Which of the following is NOT permitted to be charged or credited to the Share Premium account?
- Q8A company issues a 10% bonus share to its existing shareholders out of retained earnings. What is the net effect on total equity?