Dividends on ordinary shares are:
A) expensed when paid.
B) expensed when incurred.
C) expensed at year end.
D) a reduction of retained profits.

Question

Quizplus · Accepted Answer

Dividends on ordinary shares represent a distribution of profits to shareholders and are therefore deducted from the retained profits of the company. They are not considered an expense as they do not represent a cost of doing business.

Dividends on Ordinary Shares Are