Dividends can be paid from which of the following accounts:

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Dividends are typically paid out of retained profits, which are the earnings a company has accumulated over time after paying all expenses and taxes. In some cases, dividends can also be paid from the asset revaluation reserve, which is an equity account used to record increases in the value of fixed assets. However, paying dividends from paid-up capital (the amount of money shareholders have invested in the company) is not a common practice as it reduces the capital base of the company.

Dividends Can Be Paid from Which of the Following Accounts