ACCA · Question 26 · Preparing Basic Financial Statements
Section A
During the year ended 31 December 20X9, a limited company paid an interim dividend of $20,000. On 15 January 20Y0, the directors proposed a final dividend of $30,000 for the year ended 31 December 20X9.
How should these dividends be treated in the financial statements for the year ended 31 December 20X9?
Answer options:
Deduct $50,000 from retained earnings in the statement of changes in equity.
Deduct $20,000 from retained earnings in the statement of changes in equity; disclose the $30,000 in the notes.
Charge $20,000 as an expense in the statement of profit or loss.
Recognize a liability of $30,000 in the statement of financial position.
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