Question

The difference between gross dividend receivable and dividend received is debited to _________.

• A. interim dividend
• B. tax deducted at source
• C. net dividend
• D. difference adjustment

Answer 1

The correct option is B tax deducted at source

Dividend is a taxable item. When the company is paying a dividend, it is subject to tax deduction. Hence difference between dividend receivable and dividend received is the amount of tax deduction.