Question

While deciding about the divisible profit which of the following facts must be considered?
(A) Current depreciation
(B) Arrear of depreciation
(C) Capital profits
(D) All of the above

Answer 1

Answer:

b is the correct answer

Answer 2

While deciding about the divisible profit the current depreciation, the arrear of depreciation, capital profits must be considered (Option D).

• When a part of the profit is earned and then is divided and legally distributed among the shareholders in the form of a dividend then it is known as the 'divisible profit'.
• In a company the rate of the dividend is proposed by the directors. But, the amount of profit must be approved by the shareholders first in order to be distributed as a dividend.