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WAEC Financial Accounting 2022 Question 36

Question 36

Company Accounts

An item that would be considered a first charge against profit in a company's account is

  1. A.general reserve
  2. B.capital reserve
  3. C.ordinary dividend
  4. D.preference dividend
Show the answer and explanation

Answer: D (preference dividend)

Explanation

Preference dividend is paid before ordinary dividends and reserves, so it is the first appropriation.