Question

What is the method of treating proposed dividend in fund flow statement?

• A. It should be treated as current liability.
• B. It should be taken as an appropriation of profit.
• C. Either (A) or (B)
• D. None of these

Answer 1

The correct option is C Either (A) or (B)

Dividend is not treated as an expense, its an appropriation of profits.

There are two ways for the treatment of proposed dividend:

1) Proposed dividend should be taken as an appropriation of profit

2) Proposed dividend should be treated as current liability.