Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

Dividend is payable on................. by the company to its shareholders.

Options:

Calls in advance

Paid up capital

Nominal capital

Registered capital

Correct Answer:

Paid up capital

Explanation:

Dividends are paid on the paid up capital. Paid up Capital is the capital money actually received by the company against the shares sold. Hence, the dividends are paid only to those shareholders who have paid money. No Dividend is payable on calls in advance as it is not a part of the company's share capital.