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An item that would be considered a first charge against profit in a company's account...

Accounts - Principles of Accounts
WAEC 2022

An item that would be considered a first charge against profit in a company's account is

  • A. ordinary dividend
  • B. preference dividend
  • C. capital reserve
  • D. general reserve
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Correct Answer: Option B
Explanation

Preference dividend is a dividend that is allocated to and paid on a company's shares. If a company is unable to pay all dividends, claims to preferred dividends take precedence over claims to dividends that are paid on common basis.


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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
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