ACCA F3 Study Questions With Complete Solutions

Dividends correct answer: Are appropriations of profit after tax Paying dividends correct answer: Many companies pay dividends in 2 stages during the course of their accounting year -in mid year, after the half-year financial results are known, the company might pay an interim dividend -at the end of the year, the company might declare a further final dividend Interim dividend correct answer: Dividends declared and paid during the year -declared: Debit retained earnings Credit dividends payable -payment: Debit dividends payable Credit cash Final dividend correct answer: Dividends declared but was not paid at the year end -declared before or at the b/s date but not yet paid at the b/s date Debit retained earnings Credit dividends payable -declared after the b/s date but before the fss are authorised for issue Disclosure in the note to the accounts -declared after the b/s date but after the fss are authorised for issue Practically do nothing but theorically disclosure Other equity correct answer: Reserves Statutory reserves/ capital reserves (reserves which a company is required to set up by law and which are not