Company Financial Statements Flashcards
What is an interim dividend?
The interim dividend is an amount paid to shareholders on account of the total dividend, before the end of the year.
Which is paid first: taxation or dividends?
Dividends are paid out AFTER taxation
What is found in the shareholder’s funds section of the balance sheet?
Share capital
Share premium account
Revaluation reserve
What are the two alternative names for a bonus issue of shares?
Scrip dividend and capitalisation dividend
When shares are issued for an amount in excess of their nominal value, this is referred to as?
Issuing at a premium
What happens when bonus shares are issued?
No cash changes hands
What is the correct journal entry to transfer the annual profit to reserves?
Debit profit and loss account, credit profit and loss account reserve
For which type of shares are dividends fixed as a percentage of the nominal value of the shares?
Preference shares
Which type of shareholders are first in line to be paid after the company declares a dividend?
Preference shareholders
Which sharesholders, in the event of a solvent liquidation, will see their capital returned and share if there is a surplus upon winding up?
Ordinary shareholders
How is the dividend rate for debenture holders decided?
It is fixed
When a dividend is paid, how does this affect creditors accounts?
At year end there will be an amount recorded in creditors for the amount of the final dividend
What are the three options available to shareholders during a rights issue?
Take up the rights
Sell the rights to a third party
Let the rights lapse
True or false, a director’s loan can be a debit or a credit?
True
What is a director’s loan similar to?
A partner’s current account
