Multiple choice

Before declaring a dividend, a banking company has to reduce from its profits

(a) preliminary or share selling expenses (b) organization expenses (c) brokerage and loss incurred (d) bad debts for which adequate provision has been made

  1. Only (a) to (c)

  2. Only (b) to (d)

  3. Only (a) and (d)

  4. Only (b) and (c)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

No banking company shall pay any dividend on its shares until all its capi­talised expenses (including preliminary expenses, organisation expenses, share-selling commission, brokerage, amounts of losses incurred and any other item of expenditure not represented by tangible assets) have been completely written off.

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