Which statements are true?:
I.$\quad$ Dividends can not be paid out of amounts contributed by owners as share capital.
II.$\quad$Directors must ascertain that the company is solvent before they pay a dividend.
III.$\quad$As a general rule dividends must only be paid from profits.For this purpose profits includes reserves.
IV.$\quad$For purposes of paying dividends profits are not limited to the current period.

Question

Quizplus · Accepted Answer

I. Dividends are typically paid out of profits, not from the capital contributed by shareholders. II. Directors must ensure the company can meet its debts as they fall due before declaring dividends. III. Dividends are generally paid from accumulated profits, which include reserves. IV. Profits for dividends can come from past years, not just the current period.

Which Statements Are True?: I \quad Dividends Can Not Be Paid Out of Amounts Contributed by Paid

Which Statements Are True?:
I $\quad$ Dividends Can Not Be Paid Out of Amounts Contributed by Paid