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WAEC Financial Accounting 2018 Question 44

Question 44

Company Accounts

Interim dividend paid in the year is

  1. A.debited to the Profit and Loss Account.
  2. B.debited to the Income Surplus Account.
  3. C.credited to the Profit and Loss Account.
  4. D.credited to the Income Surplus Account.
Show the answer and explanation

Answer: B (debited to the Income Surplus Account.)

Explanation

Dividends are appropriations, debited to the income surplus (appropriation) account.