SIR WHY INTERIM DIVIDEND IS DEBITED TO P & L ADJUSTMENT ACCOUNT AND IN THE SAME WAY IT IS TREATED AS APPLICATION AND SHOWN IN APPLICATION SIDE????
CMA Vamshi Raghavendra (Student) (192 Points)
17 March 2010SIR WHY INTERIM DIVIDEND IS DEBITED TO P & L ADJUSTMENT ACCOUNT AND IN THE SAME WAY IT IS TREATED AS APPLICATION AND SHOWN IN APPLICATION SIDE????
Pawan Kr. Tomar
(CA)
(169 Points)
Replied 17 March 2010
Interim divident is certain liability to be paid by company. That is of course application of fund.
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 17 March 2010
Interim dividend IS NOT LOSS FOR THE COMPANY.... So, it is not shown in P&L account as other expenses... FIRST PART OF P&L A/C
Its a sure liability of company, which is paid out of company's available funds... its the SECOND PART OF P&L A/C
While, the annual dividend is APPROPRIATION TO THE PROFITS, i.e the third part of PROFIT & LOSS ACCOUNT...
CMA Vamshi Raghavendra
(Student)
(192 Points)
Replied 17 March 2010
ya thank you sir......
AS IT IS LIABILITY OF COMPANY TO BE PAID IT IS DEBITED TO P&L ADJUSTMENT ACCOUNT.
BUT IN THE SAME WAY IT IS SHOWN AS APPLICATION TOO ......
DOESNT IT MAKES DOUBLE EFFECT
Pawan Kr. Tomar
(CA)
(169 Points)
Replied 18 March 2010
Interim divident is liability of company (Due on date when declared) and not exenses and it comes below the line in P/L Aprropriation account. so it does not effected in two ways.
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