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Unclaimed dividend will be shown under the head ______
- a)other current liabilities
- b)trade payables
- c)short-term borrowings
- d)short-term provisions
Correct answer is option 'A'. Can you explain this answer?
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Unclaimed dividend will be shown under the head ______a)other current ...
Unclaimed Dividend
Unclaimed dividend will be shown under the head other current liabilities on a company's balance sheet. This is because unclaimed dividend represents a liability that the company owes to its shareholders but has not been claimed by them yet.
Explanation:
- Other current liabilities: This category on the balance sheet includes all current liabilities that are not classified under trade payables, short-term borrowings, or short-term provisions. Unclaimed dividend falls under this category because it represents an obligation of the company to pay dividends to its shareholders, but the payment has not been claimed by them.
- Unclaimed dividend: When a company declares dividends to its shareholders, it sets aside the amount to be paid as dividends. However, if the shareholders do not claim their dividends within a specified period, the unclaimed amount remains with the company as a liability until it is claimed.
- Disclosure: Companies are required to disclose unclaimed dividends in their financial statements to provide transparency to investors and other stakeholders about the company's financial obligations. By showing unclaimed dividends under other current liabilities, the company indicates that these funds are still owed to shareholders and are available for claim.
In conclusion, unclaimed dividend is categorized under other current liabilities on the balance sheet to reflect the company's financial obligation to shareholders that has not yet been claimed by them. This disclosure helps investors and stakeholders understand the company's financial position and liabilities.
Unclaimed dividend will be shown under the head other current liabilities on a company's balance sheet. This is because unclaimed dividend represents a liability that the company owes to its shareholders but has not been claimed by them yet.
Explanation:
- Other current liabilities: This category on the balance sheet includes all current liabilities that are not classified under trade payables, short-term borrowings, or short-term provisions. Unclaimed dividend falls under this category because it represents an obligation of the company to pay dividends to its shareholders, but the payment has not been claimed by them.
- Unclaimed dividend: When a company declares dividends to its shareholders, it sets aside the amount to be paid as dividends. However, if the shareholders do not claim their dividends within a specified period, the unclaimed amount remains with the company as a liability until it is claimed.
- Disclosure: Companies are required to disclose unclaimed dividends in their financial statements to provide transparency to investors and other stakeholders about the company's financial obligations. By showing unclaimed dividends under other current liabilities, the company indicates that these funds are still owed to shareholders and are available for claim.
In conclusion, unclaimed dividend is categorized under other current liabilities on the balance sheet to reflect the company's financial obligation to shareholders that has not yet been claimed by them. This disclosure helps investors and stakeholders understand the company's financial position and liabilities.
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Unclaimed dividend will be shown under the head ______a)other current liabilitiesb)trade payablesc)short-term borrowingsd)short-term provisionsCorrect answer is option 'A'. Can you explain this answer?
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