Question

Dividends are paid out of

(a)Accumulated Profits

 

(b)Gross Profit

c)Profit after Tax

(d)General Reserve

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Answer 1

Answer:

A dividend is a payment made by corporation to its shareholders, usually as a distribution of profits. When a corporation earns profit or surplus, the corporation is able to re-invest its profits in the business (called retained earnings) and pay a proportion of the profit as a dividend to shareholders.

Explanation:

Dividends represent a portion of a company's net income. However, dividends don't cause net income to go down. Rather, dividends are just one example of what a company might choose to do with its net income. ... Therefore, a company does not have to subtract what it pays in common stock dividends from its net income