{"id":9341,"date":"2021-10-27T12:19:29","date_gmt":"2021-10-27T06:49:29","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=9341"},"modified":"2025-10-09T15:38:11","modified_gmt":"2025-10-09T10:08:11","slug":"12th-sp-chapter-10-solution","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/","title":{"rendered":"12th SP Chapter 10 Solution (Dividend and Interest) &#8211; Maharashtra Board &#8211; Free Solution"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ea5904dbf38\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ea5904dbf38\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#12th_SP_Chapter_10_Solution\" >12th SP Chapter 10 Solution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Chapter_10_%E2%80%93_Dividend_and_Interest\" >Chapter 10 &#8211; Dividend and Interest<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_A_Select_the_correct_answer_from_the_options_given_below_and_rewrite_the_statements\" >Q.1 A) Select the correct answer from the options given below and rewrite the statements.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_B_Match_the_pairs\" >Q.1 B) Match the pairs.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_C_Write_a_word_or_a_term_or_a_phrase_which_can_substitute_each_of_the_following_statements\" >Q.1 C) Write a word or a term or a phrase which can substitute each of the following statements.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_D_State_whether_the_following_statements_are_true_or_false\" >Q.1 D) State whether the following statements are true or false.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_E_Find_the_odd_one\" >Q.1 E) Find the odd one.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_F_Complete_the_sentences\" >Q.1 F) Complete the sentences.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_G_Select_the_correct_option_from_the_bracket\" >Q.1 G) Select the correct option from the bracket.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_H_Answer_in_one_sentence\" >Q.1 H) Answer in one sentence.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_I_Correct_the_underlined_words_and_rewrite_the_following_sentences\" >Q.1 I) Correct the underlined word\/s and rewrite the following sentences.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q1_J_Arrange_in_proper_order\" >Q.1 J) Arrange in proper order<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q2_Explain_the_following_termsconcepts\" >Q.2 Explain the following terms\/concepts.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q3_Study_the_following_casesituation_and_express_your_opinion\" >Q.3 Study the following case\/situation and express your opinion.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q4_Distinguish_between_the_following\" >Q.4 Distinguish between the following.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q5_Answer_in_brief\" >Q.5 Answer in brief.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q6_Justify_the_following_statements\" >Q.6 Justify the following statements.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Q7_Answer_the_following\" >Q.7 Answer the following<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Following_are_the_features_of_Dividend\" >Following are the features of Dividend<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Following_are_the_features_of_Interest\" >Following are the features of Interest:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Legal_Provisions_for_declaration_of_Dividend\" >Legal Provisions for declaration of Dividend<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Features_of_Interim_Dividend\" >Features of Interim Dividend<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#12th_Commerce_SP_Textbook_Solution\" >12th Commerce SP Textbook Solution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/#Check_out_other_posts_related_to_the_12th_Commerce\" >Check out other posts related to the 12th Commerce<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"12th_SP_Chapter_10_Solution\"><\/span><strong>12th SP Chapter 10 Solution<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h2 class=\"wp-block-heading has-text-align-center has-black-color has-vivid-green-cyan-background-color has-text-color has-background has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Chapter_10_%E2%80%93_Dividend_and_Interest\"><\/span>Chapter 10 &#8211; Dividend and Interest<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_A_Select_the_correct_answer_from_the_options_given_below_and_rewrite_the_statements\"><\/span>Q.1 A) Select the correct answer from the options given below and rewrite the statements.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1) Dividend is paid to _____.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) Shareholder <br><\/mark><\/strong>b) Debentureholder <br>c) Depositor<\/p>\n\n\n\n<p><strong>2) _____ is profit shared by company with a shareholder.<br><\/strong>a) Interest <br>b) Rent <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">c) Dividend<\/mark><\/strong><\/p>\n\n\n\n<p><strong>3) Dividend is recommended by _____.<br><\/strong>a) Managing Director <br>b) Secretary <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">c) Board of Directors<\/mark><\/strong><\/p>\n\n\n\n<p><strong>4) Interim Dividend is declared by _____.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) Board of Directors <br><\/mark><\/strong>b) Debenture holders <br>c) Depositors<\/p>\n\n\n\n<p><strong>5) Final Dividend is declared by _____.<br><\/strong>a) Board of Directors <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">b) Shareholders <br><\/mark><\/strong>c) Depositors<\/p>\n\n\n\n<p><strong>6) Dividend cannot be declared out of _____.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) Capital <br><\/mark><\/strong>b) Profit <br>c) Reserves<\/p>\n\n\n\n<p><strong>7) Dividend amount should be transferred in a separate Bank Account within _____ days of its declaration.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) 5 <br><\/mark><\/strong>b) 15 <br>c) 50<\/p>\n\n\n\n<p><strong>8) Dividend should be paid within _____ days of its declaration.<br><\/strong>a) 3 <br>b) 13 <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">c) 30<\/mark><\/strong><\/p>\n\n\n\n<p><strong>9) _____ holders get dividend from residual profits.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) Equity share <br><\/mark><\/strong>b) Preference share <br>c) Debenture<\/p>\n\n\n\n<p><strong>10) Dividend is paid first to _____ shareholders.<br><\/strong>a) Equity <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">b) Preference <br><\/mark><\/strong>c) Deferred<\/p>\n\n\n\n<p><strong>11) _____ warrant is a cheque containing dividend amount sent by company to the shareholders.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) Dividend <br><\/mark><\/strong>b) Share <br>c) Interest<\/p>\n\n\n\n<p><strong>12) IEPF is created by _____ where unpaid dividend is transferred by company.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) Central Govt. <br><\/mark><\/strong>b) Company <br>c) Shareholders<\/p>\n\n\n\n<p><strong>13) Payment of _____ Dividend must be authorized by the Articles of Association.<br><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">a) Interim <br><\/mark><\/strong>b) Final <br>c) Bonus<\/p>\n\n\n\n<p><strong>14) _____ is a return paid to creditors by the company.<br><\/strong>a) Dividend <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">b) Interest <br><\/mark><\/strong>c) Rent<\/p>\n\n\n\n<p><strong>15) _____ is not linked to profits of the company.<br><\/strong>a) Dividend <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">b) Interest <br><\/mark><\/strong>c) Bonus<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/12th-SP-Chapter-10-Solution-1024x576.jpg\" alt=\"12th SP Chapter 10 Solution\" class=\"wp-image-10068 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/12th-SP-Chapter-10-Solution-1024x576.jpg 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/12th-SP-Chapter-10-Solution-300x169.jpg 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/12th-SP-Chapter-10-Solution-768x432.jpg 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/12th-SP-Chapter-10-Solution-1536x864.jpg 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/12th-SP-Chapter-10-Solution-640x360.jpg 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/12th-SP-Chapter-10-Solution.jpg 1920w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><figcaption class=\"wp-element-caption\"><strong><strong>12th SP Chapter 10 Solution<\/strong><\/strong><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_B_Match_the_pairs\"><\/span>Q.1 B) Match the pairs.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group A<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group B<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">a) Dividend<\/td><td class=\"has-text-align-center\" data-align=\"center\">1) Equity Shareholders<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">b) Interest<\/td><td class=\"has-text-align-center\" data-align=\"center\">2) Appropriation of profit.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">c) Interim Dividend<\/td><td class=\"has-text-align-center\" data-align=\"center\">3) Recommendation of Secretary.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">d) Final Dividend<\/td><td class=\"has-text-align-center\" data-align=\"center\">4) Registrar of company.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">e) Fluctuating Rate of Dividend<\/td><td class=\"has-text-align-center\" data-align=\"center\">5) Obligatory to pay.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">6) Decided and Declared by the Board of Directors.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">7) Decided by Board; declared by Members.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">8) Decided by the President of India.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">9) Company not allowed to pay.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">10) Declared by Govt. of India<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Answers.   <br><\/strong>a. 2) Appropriation of profit.<br>b. 5) Obligatory to pay.<br>c. 6) Decided and Declared by the Board of Directors.<br>d. 7) Decided by Board; declared by Members.<br>e. 1) Equity Shareholders<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group A<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group B<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">a) Dividend<\/td><td class=\"has-text-align-center\" data-align=\"center\">1) Must inform stock exchange about Dividend<br>declaration<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">b) Interest<\/td><td class=\"has-text-align-center\" data-align=\"center\">2) Creditors<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">c) IEPF<\/td><td class=\"has-text-align-center\" data-align=\"center\">3) Registered Shareholders.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">d) Unpaid Dividend Account<\/td><td class=\"has-text-align-center\" data-align=\"center\">4) Balance of unpaid Dividend Transferred here.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">e) Listed Company<\/td><td class=\"has-text-align-center\" data-align=\"center\">5) Unregistered company.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">6) Non-listed company.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">7) Unpaid\/Unclaimed Dividend.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">8) Balance of unpaid Bonus transferred here.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">9) Must inform Government about Dividend<br>declaration.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">10) General Public.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Answers.<br><\/strong>a. 3) Registered Shareholders.<br>b. 2) Creditors<br>c. 4) Balance of unpaid Dividend Transferred here.<br>d. 7) Unpaid\/Unclaimed Dividend.<br>e. 1) Must inform stock exchange about Dividend declaration<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" target=\"_blank\" rel=\"noreferrer noopener\">Balbharti Textbook Solutions for other subjects<\/a><br><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions\/\">Solution of all Chapters of SP<br><\/a> <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" target=\"_blank\" rel=\"noreferrer noopener\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" target=\"_blank\" rel=\"noreferrer noopener\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" target=\"_blank\" rel=\"noreferrer noopener\">3<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" target=\"_blank\" rel=\"noreferrer noopener\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" target=\"_blank\" rel=\"noreferrer noopener\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">6<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">7<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">8<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">9<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">10<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">11<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" target=\"_blank\" rel=\"noreferrer noopener\">12<\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_C_Write_a_word_or_a_term_or_a_phrase_which_can_substitute_each_of_the_following_statements\"><\/span>Q.1 C) Write a word or a term or a phrase which can substitute each of the following statements.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1) The return on investment paid to the shareholders of the company.<\/strong><br><span class=\"has-inline-color has-vivid-purple-color\">Ans: Dividend<\/span><\/p>\n\n\n\n<p><strong>2) The meeting where final dividend is declared.<\/strong><br><span class=\"has-inline-color has-vivid-purple-color\">Ans: Annual General Meeting<\/span><\/p>\n\n\n\n<p><strong>3) The company which has to intimate stock exchange about declaration of dividend.<\/strong><br><span class=\"has-inline-color has-vivid-purple-color\">Ans: Listed Company<\/span><\/p>\n\n\n\n<p><strong>4) The shareholders who get dividend at a fixed rate.<\/strong><br><span class=\"has-inline-color has-vivid-purple-color\">Ans: Preference Shareholders<\/span><\/p>\n\n\n\n<p><strong>5) The shareholders who get dividend at a fluctuating rate.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: Equity Shareholders <\/span><\/p>\n\n\n\n<p><strong>6) Request by shareholder in prescribed form for payment of dividend into shareholders bank account.<\/strong> <br><span class=\"has-inline-color has-vivid-purple-color\">Ans: Dividend Mandate<\/span><\/p>\n\n\n\n<p><strong>7) Number of days within which payment of dividend be completed b company, after its declaration.<\/strong><br><span class=\"has-inline-color has-vivid-purple-color\">Ans: 30 days <\/span><\/p>\n\n\n\n<p><strong>8) Dividend declared between two AGMs.<\/strong><br><span class=\"has-inline-color has-vivid-purple-color\">Ans: Interim Dividend<\/span><\/p>\n\n\n\n<p><strong>9) Dividend decided and declared by the Board.<\/strong><br><span class=\"has-inline-color has-vivid-purple-color\">Ans: Interim Dividend <\/span><\/p>\n\n\n\n<p><strong>10) The return paid to the creditors by the company.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: Interest <\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_D_State_whether_the_following_statements_are_true_or_false\"><\/span>Q.1 D) State whether the following statements are true or false.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1) Dividend is paid to registered shareholders of the company.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: True<\/span><\/p>\n\n\n\n<p><strong>2) Dividend is decided by the Board.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: True<\/span><\/p>\n\n\n\n<p><strong>3) Dividend is decided by the shareholders.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: False<\/span><\/p>\n\n\n\n<p><strong>4) Dividend once declared cannot be revoked.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: True<\/span><\/p>\n\n\n\n<p><strong>5) Dividend cannot be paid out of capital.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: True<\/span><\/p>\n\n\n\n<p><strong>6) Shareholders decide about the rate and amount of profit to be given as dividend.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: False<\/span><\/p>\n\n\n\n<p><strong>7) All categories of shareholders get a fixed rate dividend.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: False<\/span><\/p>\n\n\n\n<p><strong>8) IEPF is the fund created by company.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: False<\/span><\/p>\n\n\n\n<p><strong>9) Interest is a liability for company.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: True<\/span><\/p>\n\n\n\n<p><strong>10) Interest is paid to shareholders of company.<br><\/strong><span class=\"has-inline-color has-vivid-purple-color\">Ans: False<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_E_Find_the_odd_one\"><\/span>Q.1 E) Find the odd one.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Final Dividend, Interim Dividend, <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Interest.<\/mark><\/strong><\/li>\n\n\n\n<li><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Out of Capital,<\/mark><\/strong> Out of free reserve, Out of money given by the government.<\/li>\n\n\n\n<li>Dividend Account, <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Dividend Mandate<\/mark><\/strong>, unpaid\/unclaimed dividend Account.<\/li>\n\n\n\n<li>Dividend warrant, <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Dividend Mandate<\/mark><\/strong>, Cheque.<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_F_Complete_the_sentences\"><\/span>Q.1 F) Complete the sentences.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) Word dividend is derived from Latin term <strong><span style=\"text-decoration: underline;\">Dividendum<\/span><\/strong> .<\/p>\n\n\n\n<p>2) Dividend is paid to <strong><span style=\"text-decoration: underline;\">Registered Shareholders<\/span><\/strong>.<\/p>\n\n\n\n<p>3) Dividend can be declared only on the recommendation of <strong><span style=\"text-decoration: underline;\">Board of Director<\/span><\/strong>.<\/p>\n\n\n\n<p>4) Dividend must be paid in <strong><span style=\"text-decoration: underline;\">Cash<\/span><\/strong>.<\/p>\n\n\n\n<p>5) The meeting at which final dividend is approved is <strong><span style=\"text-decoration: underline;\">Annual General Meeting<\/span><\/strong>.<\/p>\n\n\n\n<p>6) Dividend cannot be paid out of <strong><span style=\"text-decoration: underline;\">Capital<\/span><\/strong>.<\/p>\n\n\n\n<p>7) Interim dividend is decided and declared by <strong><span style=\"text-decoration: underline;\">Board of Directors<\/span><\/strong>.<\/p>\n\n\n\n<p>8) Predecided and a fixed rate of dividend is paid to <strong><span style=\"text-decoration: underline;\">Preference Shareholders<\/span><\/strong>.<\/p>\n\n\n\n<p>9) Payment of dividend must be completed within <strong><span style=\"text-decoration: underline;\">30 Days<\/span><\/strong>.<\/p>\n\n\n\n<p>10) Payment of Interim Dividend needs to be authorized by <strong><span style=\"text-decoration: underline;\">Articles of Association<\/span><\/strong>.<\/p>\n\n\n\n<p>11) The obligator payment made by company to its creditors is called as <strong><span style=\"text-decoration: underline;\">Interest<\/span><\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_G_Select_the_correct_option_from_the_bracket\"><\/span>Q.1 G) Select the correct option from the bracket.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>I)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group A<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group B<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">a) Dividendum<\/td><td class=\"has-text-align-center\" data-align=\"center\">1) <span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">Latin term<\/span><\/span><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><span class=\"has-inline-color has-black-color\">b) <\/span>Interest<\/td><td class=\"has-text-align-center\" data-align=\"center\">2) <span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">Creditors<\/span><\/span><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">c) <span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">At AGM<\/span><\/span><\/td><td class=\"has-text-align-center\" data-align=\"center\"><span class=\"has-inline-color has-black-color\">3) Final Dividend<\/span><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><span class=\"has-inline-color has-black-color\">d) <\/span><span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">At Board Meetin<\/span><\/span><span class=\"has-inline-color has-vivid-purple-color\"><span style=\"text-decoration: underline;\">g<\/span><\/span><\/td><td class=\"has-text-align-center\" data-align=\"center\">4) Interim Dividend<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">e) Govt. Fund<\/td><td class=\"has-text-align-center\" data-align=\"center\">5) <span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">IEPF<\/span><\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>II)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group A<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group B<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">a) Preference Shares<\/td><td class=\"has-text-align-center\" data-align=\"center\">1) <span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">Fixed rate Dividend<\/span><\/span><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><span class=\"has-inline-color has-black-color\">b)Equity Shares<\/span><\/td><td class=\"has-text-align-center\" data-align=\"center\">2) <span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">Dividend at a Fluctuating Rate<\/span><\/span><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">c) Deposit holders<\/td><td class=\"has-text-align-center\" data-align=\"center\"><span class=\"has-inline-color has-black-color\">3) <\/span><span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">Interest<\/span><\/span><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><span class=\"has-inline-color has-black-color\">d) <\/span><span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">Within 30 days<\/span><\/span><\/td><td class=\"has-text-align-center\" data-align=\"center\">4) Payment of Dividend<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">e) <span style=\"text-decoration: underline;\"><span class=\"has-inline-color has-vivid-purple-color\">Unclaimed\/Unpaid Dividend<\/span><\/span><\/td><td class=\"has-text-align-center\" data-align=\"center\">5) Dividend Declared but not paid\/claimed<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_H_Answer_in_one_sentence\"><\/span>Q.1 H) Answer in one sentence.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1) What is Dividend?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> It is that part of the profits of the company which is distributed amongst its shareholders. The dividend is a share in distributable profits of the company to which the shareholder is entitled when it is formally declared by the company.\u2019<\/p>\n\n\n\n<p><strong>2) Who has right to recommend Dividend?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Board of Directors has a right to recommend dividend.<\/p>\n\n\n\n<p><strong>3) What is the final Dividend?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Final Dividend is declared and paid after the close of the financial year.<\/p>\n\n\n\n<p><strong>4) What is an Interim Dividend?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> The Dividend declared by the Board of Directors between two Annual General Meetings is called Interim Dividend.<\/p>\n\n\n\n<p><strong>5) Who declares Interim Dividend?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Board of Directors declares Interim Dividend.<\/p>\n\n\n\n<p><strong>6) Which shares get dividend at a fixed rate?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Preference Shares get dividend at a fixed rate.<\/p>\n\n\n\n<p><strong>7) Which shares get dividend at a fluctuating rate?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Equity Share get dividend at a fluctuating rate.<\/p>\n\n\n\n<p><strong>8) At which Meeting Interim Dividend is decided and declared?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Interim Dividend is decided and declared at the meeting of the Board of Directors.<\/p>\n\n\n\n<p><strong>9) What is Interest?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> In financial terms, it is a payment made for using money of another. i.e. Borrower takes money from the lender.<\/p>\n\n\n\n<p><strong>10) State the time within which Unpaid Dividend be transferred to unpaid dividend Account?<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> This transfer should be within 7 days of the end of 30 days within which payment was to be made. In other words, this transfer should happen within 37 days from the declaration of dividend.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" target=\"_blank\" rel=\"noreferrer noopener\">Balbharti Textbook Solutions for other subjects<\/a><br><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions\/\">Solution of all Chapters of SP<br><\/a> <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" target=\"_blank\" rel=\"noreferrer noopener\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" target=\"_blank\" rel=\"noreferrer noopener\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" target=\"_blank\" rel=\"noreferrer noopener\">3<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" target=\"_blank\" rel=\"noreferrer noopener\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" target=\"_blank\" rel=\"noreferrer noopener\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">6<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">7<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">8<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">9<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">10<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">11<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" target=\"_blank\" rel=\"noreferrer noopener\">12<\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_I_Correct_the_underlined_words_and_rewrite_the_following_sentences\"><\/span>Q.1 I) Correct the underlined word\/s and rewrite the following sentences.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) <strong>Dividend is paid to <span style=\"text-decoration: underline;\">creditors<\/span>.<\/strong><br><strong>Answer: Registered Shareholders. <\/strong><\/p>\n\n\n\n<p>2) Interest is paid to <strong><span style=\"text-decoration: underline;\">shareholders<\/span><\/strong>.<br><strong>Answer: Creditors.<\/strong><\/p>\n\n\n\n<p>3) <strong><span style=\"text-decoration: underline;\">Final Dividend<\/span> is paid between two AGMs.<\/strong><br><strong>Answer: Interim Dividend<\/strong><\/p>\n\n\n\n<p>4) <strong><span style=\"text-decoration: underline;\">Special Resolution<\/span><\/strong> must be passed to declare Final Dividend.<br><strong>Answer: Ordinary Resolution <\/strong><\/p>\n\n\n\n<p>5) Dividend must be paid within <strong><span style=\"text-decoration: underline;\">60 days<\/span><\/strong> of its declaration.<br><strong>Answer: 30 Days<\/strong><\/p>\n\n\n\n<p>6) The Dividend to be paid should be transferred to Dividend A\/c within <strong><span style=\"text-decoration: underline;\">30 days<\/span><\/strong> of its declaration.<br><strong>Answer: 5 days<\/strong><\/p>\n\n\n\n<p>7) <strong><span style=\"text-decoration: underline;\">Dividend<\/span><\/strong> is an obligation to be paid by a company every year.<br><strong>Answer: Interest<\/strong><\/p>\n\n\n\n<p>8) <strong><span style=\"text-decoration: underline;\">Preference<\/span><\/strong> shareholders are given the last priority in payment of dividend.<br><strong>Answer: Equity <\/strong><\/p>\n\n\n\n<p>9) <strong><span style=\"text-decoration: underline;\">Preference<\/span><\/strong> shareholders get dividend from residual profits.<br><strong>Answer: Equity<\/strong><\/p>\n\n\n\n<p>10) <strong><span style=\"text-decoration: underline;\">Dividend<\/span><\/strong> is payable every year irrespective of profits made by company.<br><strong>Answer: Interest<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_J_Arrange_in_proper_order\"><\/span>Q.1 J) Arrange in proper order<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1)<br>a) Recommendation of Dividend.<br>b) Checking sufficiency of profits<br>c) Board Meeting<br><strong>Answer: (b) Checking sufficiency of profits  (c) Board Meeting  (a) Recommendation of Dividend<\/strong><\/p>\n\n\n\n<p>2) <br>a) Transfer to Dividend Account<br>b) Transfer to IEPF<br>c) Transfer to Unpaid Dividend Account<br><strong>Answer: (a) Transfer to Dividend Account<\/strong> <strong>(c) Transfer to Unpaid Dividend Account<\/strong> <strong>(b) Transfer to IEPF<\/strong><\/p>\n\n\n\n<p>3)<br>a) Closure of Register of Members.<br>b) Intimate Stock Exchange of Board Meeting.<br>c) Intimate Stock Exchange of declaration of dividend.<br><strong>Answer: (b) Intimate Stock Exchange of Board Meeting. (c) Intimate Stock Exchange of declaration of dividend. (a) Closure of Register of Members.<\/strong><\/p>\n\n\n\n<p>4)<br>a) Decision on Rate of Dividend<br>b) Transfer to IEPF<br>c) Payment of Dividend.<br><strong>Answer: (a) Decision on Rate of Dividend (c) Payment of Dividend (b) Transfer to IEPF<\/strong><\/p>\n\n\n\n<p>5)<br>a) Payment of Interim Dividend<br>b) Board meeting deciding and declaring Interim Dividend.<br>c) Authorization of Articles of Association.<br><strong>Answer: (c) Authorization of Articles of Association. (c) Board meeting deciding and declaring Interim Dividend (a) Payment of Interim Dividend<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q2_Explain_the_following_termsconcepts\"><\/span>Q.2 Explain the following terms\/concepts.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">1) Profit<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) Profit is the difference between revenues and expenses for a given period.<br>b) Profit making and its maximization is the prime aim of all business organizations including a Joint Stock Company.<br>c) The owners of company viz. the shareholders expect return on their investment in the form of profits of the company.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>2) <a href=\"https:\/\/economictimes.indiatimes.com\/definition\/bonus-share\" data-type=\"URL\" data-id=\"https:\/\/economictimes.indiatimes.com\/definition\/bonus-share\" target=\"_blank\" rel=\"noreferrer noopener\">Dividend<\/a><\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer: <\/strong>a) Dividend is the return payable to the shareholders of the company for their investment in the share capital.<br>b) It is that part of the profits of the company which is distributed amongst its shareholders.<br>c) Dividend is \u2018a share in distributable profits of the company to which the shareholder is entitled when it is formally declared by the company.\u2019<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">3) <strong>Interest<\/strong><\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) It is the return payable to the creditors of the company viz. Debenture holder \/ Deposit holders for the loan given by them to the company.<br>b) In financial terms, it is a payment made for using money of another. i.e. Borrower takes money from the lender.<br>c) So interest is the cost of renting money, for the borrower and it is the income from lending money for the lender.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">4) Final Dividend<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) It is declared and paid after the close of the financial year.<br>b) It is decided and recommended by the Board of Directors. It is declared by the shareholders in the AGM.<br>c) It is declared from different sources like; current year\u2019s profits, free reserves, capital profits, Money provided by Govt. for dividend, etc.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">5) Interim Dividend<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) It is declared and paid between two AGMs of an accounting year.<br>b) It is decided and declared by the Board of Directors in the Board Meeting.<br>c) It is declared out of profits of the current accounting year.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">6) Unpaid Dividend<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) The dividend declared by company but has not been paid by it or claimed by a shareholder within 30 days of its declaration is termed as Unpaid and Unclaimed Dividend.<br>b) Total amount of dividend which remains unpaid\/unclaimed should be transferred to \u2018Unpaid Dividend Account\u2019 opened in a scheduled Bank by the company.<br>c) This transfer should be within 7 days of the end of 30 days within which payment was to be made. In other words, this transfer should happen within 37 days from the declaration of dividend.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">7) Unpaid Dividend Account<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) Total amount of dividend which remains unpaid\/unclaimed should be transferred to \u2018Unpaid Dividend Account\u2019 opened in a scheduled Bank by the company.<br>b) This transfer should be within 7 days of the end of 30 days within which payment was to be made. In other words, this transfer should happen within 37 days from the declaration of dividend.<br>c) Within 90 (Ninet) days of transfer of amount in the \u2018Unpaid Dividend Account\u2019, the company is required to put on its website or any other website as approved by the Central Government, a statement which shows names, last known addresses and unpaid amount payable to each shareholder.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">8) Dividend Mandate<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) A shareholder may wish to get dividend credited directly in the bank account.<br>b) Shareholder is required to send a request to the company in the prescribed form called. \u2018Dividend Mandate\u2019.<br>c) Dividend mandate authorizes the company to pay dividend directly to shareholders\u2019 bankers.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">9) IEPF<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) IEPF stands for Investors Education and Protection Fund. IEPF has been set up b the Central Government, since 2001. Examples of some amounts to be transferred to IEPF are &#8211; matured deposits with companies, matured debentures with companies, etc.<br>b) Any amount in the unpaid Dividend Account of a company that remains unpaid\/ unclaimed for a period of 7 years from the date of such a transfer shall be, transferred b the company to \u2018Investors Education and Protection Fund\u2019 (IEPF).<br>c) The claimant of money will have to follow the procedures and submit necessary documents to get claim from IEPF along with a statement in the prescribed form which gives details of such transfers.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">10) Rate of Dividend<\/span><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> a) Dividend rate, expressed as a percentage or yield, is a financial ratio that shows how much a company pays out in&nbsp;dividends&nbsp;each year relative to its stock price.<br>b) The Board of Directors in Board Meeting decide the rate of dividend. The rate of final dividend is approved by shareholders in a shareholder&#8217;s meeting.<br>c) The rate of dividend for Equity shareholders are fluctuating. and Preference shareholders get dividend ate fixed rate.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" rel=\"noreferrer noopener\">Solution of other subjects<\/a><br>Solution of all Chapters of SP<\/strong><br><strong> <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" rel=\"noreferrer noopener\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" rel=\"noreferrer noopener\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" rel=\"noreferrer noopener\">3<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" rel=\"noreferrer noopener\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" rel=\"noreferrer noopener\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" rel=\"noreferrer noopener\">6<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" rel=\"noreferrer noopener\">7<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" rel=\"noreferrer noopener\">8<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" rel=\"noreferrer noopener\">9<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" rel=\"noreferrer noopener\">10<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" rel=\"noreferrer noopener\">11<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" rel=\"noreferrer noopener\">12<\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q3_Study_the_following_casesituation_and_express_your_opinion\"><\/span>Q.3 Study the following case\/situation and express your opinion.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>1) LMN Co Limited decides to declare dividend for the financial year 2018-19 in which it has earned profits less than their expectations :<\/strong><\/mark><\/p>\n\n\n\n<p><strong>a) Is Board right in recommending a dividend of Rs. 5\/- per share out of free reserves?<br>Answer:<\/strong> Yes, Board is right in recommending a dividend of Rs. 5\/- per share out of free reserves as a dividend can be paid out of free reserve of the company.<\/p>\n\n\n\n<p><strong>b) Can Board declare the dividend though it is not approved by AGM?<br>Answer:<\/strong> No, Board can not declare the dividend though it is not approved by AGM. Because It is decided and recommended by the Board of Directors. It is declared by the shareholders in the AGM.<\/p>\n\n\n\n<p><strong>c) Can the Board give dividend in the form of gifts?<br>Answer:<\/strong> No, Board can not give dividend in the form of gifts. Because dividend must be paid in cash and not in kind.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>2) ABC Co. Ltd. decides to pay Interim Dividend:<\/strong><\/mark><\/p>\n\n\n\n<p><strong>a) Can it be paid out of free reserves?<br>Answer:<\/strong> No, Interim dividend cannot be paid out of any free reserves.<\/p>\n\n\n\n<p><strong>b) Is the Board right in declaring the same at the Board Meeting?<br>Answer:<\/strong> Yes, the Board is right in declaring the interim dividend at the Board Meeting.<\/p>\n\n\n\n<p><strong>c) Can the company distribute the same within 30 days of its declaration?<br>Answer:<\/strong> Yes, the company should distribute interim dividend within 30 days of its declaration.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>3) RAJ Company limited decides to pay Interim Dividend:<\/strong><\/mark><\/p>\n\n\n\n<p><strong>a) Is the Board justified to decide Interim Dividend of Rs 5\/per share even though profits till date are insufficient?<br>Answer:<\/strong> No, the Board is not justified to decide Interim Dividend of Rs 5\/per share if the profits till date are insufficient. This is because the interim dividend is declared out of profits.<\/p>\n\n\n\n<p><strong>b) Can the Board declare it out of Free Reserves?<br>Answer:<\/strong> No, the Board cannot declare it out of Free Reserves.<\/p>\n\n\n\n<p><strong>c) Can the Board declare it out of Capital?<\/strong><br><strong>Answer:<\/strong> No, the Board cannot declare it out of Capital. It is declared out of profits of the current accounting year.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">4) DIAMOND Co. Ltd. is considering to declare Interim Dividend.<\/span> <\/strong><\/p>\n\n\n\n<p><strong>a) In how many days of declaration it should transfer the funds to Dividend Account?<br>Answer:<\/strong> The amount to be given as Interim Dividend must be credited in a separate Bank account in a scheduled bank within 5 (five) days of its declaration.<\/p>\n\n\n\n<p><strong>b) In how many days it must pay it to shareholders?<br>Answer:<\/strong> Interim Dividend should be paid within 30 days of its declaration.<\/p>\n\n\n\n<p><strong>c) In how many days of declaration it must transfer the funds to the Unpaid Dividend A\/C?<\/strong> <strong><br>Answer:<\/strong> Unpaid \/ Unclaimed Interim Dividend should be transferred to \u2018Unpaid Dividend Account within 7 days of the expiry of 30 days of declaration i.e. 37 days of its declaration.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>5) The Board of Directors of STAR Co. Ltd. which is a listed company recommends a dividend of Rs 15\/- per share to be paid in cash.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>a) Is it justified to pay the dividend firstly to its Preference Shareholders and then after to Equity Shareholders?<br>Answer:<\/strong> Yes, it is justified to pay the dividend firstly to its Preference Shareholders and then after to Equity Shareholders. Preference shareholders are entitled to the dividend before it is paid to the equity shareholders as per the terms of issue of the preference shares.<\/p>\n\n\n\n<p><strong>b) Is the AGM required to approve the same?<br>Answer:<\/strong> Yes, AGM is required to approve the dividend. The dividend is approved by shareholders by passing an Ordinary Resolution at the Annual General Meeting.<\/p>\n\n\n\n<p><strong>c) Can the company pay dividend in cash?<br>Answer:<\/strong> Yes, the company can pay dividend in cash. The dividend may be paid by cheque or warrant or by any electronic mode to the shareholder.<\/p>\n\n\n\n<p><strong><span class=\"has-inline-color has-vivid-purple-color\">6) GOLD Co. Ltd. declares a dividend of Rs 10\/- per share for F.Y. 2018-19.<\/span><\/strong><\/p>\n\n\n\n<p><strong>a) Is company under default if dividend was not paid within 30 days of its declaration?<br>Answer:<\/strong> Yes, the company is under default if dividend was not paid within 30 days of its declaration.<\/p>\n\n\n\n<p><strong>b) Is company right in transferring the unpaid dividend to its Debenture Reserve Accounts?<\/strong> <strong><br>Answer:<\/strong> No, the company is not right in transferring the unpaid dividend to its Debenture Reserve Accounts. The total amount of dividend which remains unpaid\/unclaimed should be transferred to \u2018Unpaid Dividend Account\u2019.<\/p>\n\n\n\n<p><strong>c) Does the company have to transfer the amount of unpaid dividend to IEPF after 30 days?<\/strong> <strong><br>Answer:<\/strong> No. Any amount in the unpaid Dividend Account of a company that remains unpaid\/unclaimed for a period of 7 (seven) years from the date of such a transfer shall be, transferred by the company to \u2018Investors Education and Protection Fund\u2019 (IEPF).<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q4_Distinguish_between_the_following\"><\/span>Q.4 Distinguish between the following.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1) Final Dividend and Interim Dividend.<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Points<\/strong><\/td><td><strong><strong><strong><strong>Final Dividend<\/strong><\/strong><\/strong><\/strong><\/td><td><strong><strong><strong><strong>Interim Dividend<\/strong><\/strong><\/strong><\/strong><\/td><\/tr><tr><td>1) Meaning<\/td><td>It is declared and paid after the<br>close of the financial year.<\/td><td>It is declared and paid between<br>two AGMs of an accounting<br>year.<\/td><\/tr><tr><td>2) Who Declares<\/td><td>It is decided and recommended<br>by the Board of Directors. It is<br>declared by the shareholders in<br>the AGM.<\/td><td>It is decided and declared by<br>the Board of Directors in the<br>Board Meeting.<\/td><\/tr><tr><td>3) Authorization<\/td><td>It\u2019s declaration does not need<br>authorization by Articles of<br>Association.<\/td><td>It can be declared only if<br>Articles of Association permits<br>its declaration.<\/td><\/tr><tr><td>4) When Declared<\/td><td>It is declared at the Annual<br>General Meeting of the company<\/td><td>It is declared between two<br>Annual General Meetings of the<br>company.<\/td><\/tr><tr><td>5) Rate<\/td><td>Rate of final dividend is always<br>higher than Interim Dividend.<\/td><td>Rate of Interim dividend is lower than final dividend.<\/td><\/tr><tr><td>6) Source<\/td><td>It is declared from different<br>sources like; current year\u2019s<br>profits, free reserves, capital<br>profits, Mone provided by<br>Govt. for dividend, etc.<\/td><td>It is declared out of profits of<br>the current accounting year.<\/td><\/tr><tr><td>7) Accounting Treatment \/ Aspect<\/td><td>It is declared only after the<br>accounts of the year are prepared<br>and finalized.<\/td><td>It is declared before preparation<br>of the final accounts of the<br>company<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>2) Dividend and Interest<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Points<\/strong><\/td><td><strong><strong><strong><strong>Dividend<\/strong><\/strong><\/strong><\/strong><\/td><td><strong><strong><strong><strong>Inter<\/strong><\/strong><\/strong>est<\/strong><\/td><\/tr><tr><td>1) Meaning<\/td><td>Dividend is the return payable to<br>the shareholders of the company<br>for their investment in the share<br>capital.<\/td><td>It is the return payable to the<br>creditors of the company viz.<br>Debenture holder \/ Deposit<br>holders for the loan given b<br>them to the company.<\/td><\/tr><tr><td>2) Given to whom<\/td><td>It is paid to the member i.e. the<br>owners of the company.<\/td><td>It is paid to the creditor of the<br>company.<\/td><\/tr><tr><td>3) Obligation<\/td><td>It is to be paid only when<br>company has made profits.<br>Therefore no obligation \/<br>compulsion to pay dividend.<\/td><td>It is not linked to the profits of<br>the company. Payment of interest<br>is an obligation and is to be paid<br>b the company compulsorily.<\/td><\/tr><tr><td>4) When Payable<\/td><td>It is payable when a company<br>earns sufficient profit in a year<br>after fulfilling all obligations.<\/td><td>It is payable every year<br>irrespective of the profits of the<br>company.<\/td><\/tr><tr><td>5) Rate<\/td><td>It is paid at a fluctuating rate<br>to the equity shareholders since<br>it is linked to the profits of<br>company.<\/td><td>Rate of interest is fixed and pre-<br>determined at the time of issue<br>of the security.<\/td><\/tr><tr><td>6) Resolution<\/td><td>Payment of Final Dividend<br>requires a Board resolution and<br>an ordinary resolution at the<br>AGM while Interim Dividend<br>can be paid b passing only a<br>Board Resolution.<\/td><td>Payment of interest does not<br>require passing of a resolution<br>at any meeting.<\/td><\/tr><tr><td>7) Accounting Treatment \/ Aspect<\/td><td>Dividend is an appropriation of<br>profit.<\/td><td>Interest is a charge on profit.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q5_Answer_in_brief\"><\/span>Q.5 Answer in brief.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">1) State any four points to be kept in mind by a Listed Company with respect to Dividend.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Where a company&#8217;s shares are listed on the Stock Exchanges, additional requirements with respect to Listings agreements must be followed like :<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Notify stock exchange where company&#8217;s securities are listed at least 2 days in advance of the date of meeting of the Board at which recommendation of final dividend is to be considered.<\/li>\n\n\n\n<li>Intimate Stock Exchange immediately about declaration of dividend after the Board Meeting.<\/li>\n\n\n\n<li>Give notice of Book closure to the stock exchange at least 7 working days before the closure.<\/li>\n\n\n\n<li>Close the Register of members and the Transfer Register.<\/li>\n\n\n\n<li>It must use electronic mode of payment such as Electronic Clearing Services (ECS) or National Electronic Fund Transfer (NEFT); as approved b the Reserve Bank of India (RBI).<\/li>\n\n\n\n<li>Listed company has to express the dividend on per share basis only.<\/li>\n<\/ul>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>2) Discuss any four features of dividend.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Following are the features of Dividend:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is the portion of profits of the company paid to its shareholders.<\/li>\n\n\n\n<li>It is payable out of the profits of the company.<\/li>\n\n\n\n<li>Dividend is an unconditional payment made by the company.<\/li>\n\n\n\n<li>Company can pay dividend only to the shareholders viz. (1) Equity (2) Preference.<\/li>\n\n\n\n<li>If the company has issued equity shares with differential rights as to dividend, the terms of issue of such shares will govern rights of shareholders about receiving the dividend.<\/li>\n\n\n\n<li>Dividend cannot be declared out of capital.<\/li>\n\n\n\n<li>Dividend can be declared only on recommendation of the Board of Directors.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Dividend, as recommended by Board of Directors, is approved and declared by a resolution passed at the Annual General Meeting by the shareholders.<\/li>\n\n\n\n<li>Dividend for any previous year cannot be declared once that year\u2019s Annual Account has been approved in the AGM.<\/li>\n\n\n\n<li>Dividend once approved and declared by shareholders creates a debt. It cannot be revoked.<\/li>\n\n\n\n<li>Dividend includes Interim Dividend.<\/li>\n\n\n\n<li>Dividend must be paid in cash and not in kind.<\/li>\n\n\n\n<li>Dividend is to be paid on paid-up value of shares.<\/li>\n\n\n\n<li>Dividend cannot be paid on calls paid in advance.<\/li>\n<\/ul>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>3) Explain the features of Interest.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> Following are the features of interest.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest is the price paid for the productive services rendered by capital.<\/li>\n\n\n\n<li>It is directly related to risk. Higher the risk, higher is the interest.<\/li>\n\n\n\n<li>The rate of Interest is expressed as annual percentage of Principal.<\/li>\n\n\n\n<li>The rate of interest is determined b various factors like money supply, fiscal policy, volume of borrowings, rate of inflation etc.<\/li>\n\n\n\n<li>Interest is a charge against the profit of the company. Even if company makes no profit, interest should be paid.<\/li>\n\n\n\n<li>It is payable at a fixed and generally pre-determined rate.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" rel=\"noreferrer noopener\">Solution of other subjects<\/a><br>Solution of all Chapters of SP<\/strong><br><strong> <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" rel=\"noreferrer noopener\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" rel=\"noreferrer noopener\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" rel=\"noreferrer noopener\">3<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" rel=\"noreferrer noopener\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" rel=\"noreferrer noopener\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" rel=\"noreferrer noopener\">6<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" rel=\"noreferrer noopener\">7<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" rel=\"noreferrer noopener\">8<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" rel=\"noreferrer noopener\">9<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" rel=\"noreferrer noopener\">10<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" rel=\"noreferrer noopener\">11<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" rel=\"noreferrer noopener\">12<\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q6_Justify_the_following_statements\"><\/span>Q.6 Justify the following statements.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>1) Dividend is paid out of profits of the company.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong><br>a) Under a depository system securities are held in electronic form. <br>b) All risks associated with physical certificates like delays, lost, theft, mutilation, bad deliveries, etc. are totally eliminated.<br>c) It is the safest and secure way of holding securities.<br>d) It offers scope for paperless trading by using state-of-art technology.<br>e) It leads to the elimination of storage and handling of certificates.<br>f) Therefore, Electronic holding of securities is safer than physical holding.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">2) Interim dividend cannot be paid out of free reserves.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>a) Under a depository system securities are held in electronic form.<br>b) The transfer and settlement of securities done electronically.<br>c) Efforts in filling transfer forms and lodging the documents is eliminated.<br>d) Also the stamp duty levied on the transfer of physical shares is not applicable.<br>e) Processing time in the transfer of securities is reduced and neither the securities nor the cash is tied\/held up for unnecessarily a long time.<br>f) Hence, Depository provides easy and quicker transfer of shares.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">3) AGM is crucial for Final Dividend.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>a) Under a depository system securities are held in electronic form.<br>b) The transfer and settlement of securities done electronically.<br>c) Processing time in the transfer of securities is reduced and neither the securities nor the cash is tied\/held up for unnecessarily a long time.<br>d) Costs, efforts and time involved in printing and distribution of certificates in cases of new issues, bonus, transfers, etc. is saved.<br>e) Efforts in filling transfer forms and lodging the documents is eliminated.<br>f) Also the stamp duty levied on the transfer of physical shares is not applicable.<br>g) Hence, the Depository system results in reduced time, cost and efforts.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">4) Listed Company has to follow additional guidelines on dividend matters.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>a) Banking system keeps the money safe. Similarly, Depository system keeps the securities safe.<br>b) In bank funds are held in accounts having unique numbers. Similarly, Securities are held in accounts having<br>unique IDs.<br>c) Like bank, There is no physical handling of securities during allotments, transfers, etc.<br>d) In banking system The transfer of funds between accounts is done. Similarly, in the Depository system, The transfer of securities between accounts is done.<br>e) Hence, Depository system is very similar to the Banking system.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">5) Equity shares get last priority in dividend.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong><br>a) A dividend is a share in the distributable profits of the company to which the shareholder is entitled when it is formally declared by the company.<br>b) The dividend is payable only to the registered shareholders of the company.<br>c) Preference shareholders are entitled to dividends before it is paid to the equity shareholders as per the terms of the issue of preference shares.<br>d) Equity shareholders will get dividends from residual profits. i.e. after paying to preference shareholders and arrears of dividend on cumulative preference shares.<br>e) Thus, Equity shares get the last priority in dividends.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">6) Unpaid dividend cannot be used by the company.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>a) Depository is an organization like the Central Bank where securities are held in electronic form at the investor\u2019s request.<br>b) Depository system convert physical certificates into electronic and electronic into physical.<br>c) Dematerialization is a process whereby a client can get physical certificates converted into electronic mode.<br>d) Rematerialization is the process whereby a client can get his electronic holdings of securities converted into physical certificates.<br>e) All risks associated with physical certificates like delays, lost, theft, mutilation, bad deliveries, etc. are totally eliminated.<br>f) Hence, Depository system allows both: Physical to electronic and electronic to physical conversion.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">7) Interest is a liability\/obligation of the company.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong><br>a) Interest is a payment made for using another money so it is the cost of renting the money for the borrower and it is the income from lending money for the lender. <br>b) The company has to pay interest, if it has borrowed money from creditors like Debenture holders, Depositors, Bondholders, etc.<br>c) Interest is the liability of the company as it is a payment made for using money from the lender.<br>d) Interest is a charge against the profit of the company.<br>e) Even if, the company makes no profit, it has to pay interest to borrowers.<br>f) Thus, it is rightly said that interest is a liability\/ obligation for the company.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">8) Approval of members is not needed for Interim Dividend.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong><br>1) It is a code that uniquely identifies a specific securities issue.<br>2) ISINs in any country are allotted by that country\u2019s NNA (National Numbering Agency)<br>3) ISIN is a standard numbering system that is accepted globally.<br>4) In India, issuing ISIN to securities is assigned by SEBI to NSDL (for demated shares) SEBI works as NNA in India.<br>5) For Government securities, allotment of ISIN is done by the RBI.<br>6) ISIN consists of a 12 (Twelve) digit alpha-numeric code which is divided in 3 (Three) parts.<br>7) The company has to apply for ISIN for its securities with documents like prospectus.<br>8) Hence, ISIN is necessary component of Demat.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" rel=\"noreferrer noopener\">Solution of other subjects<\/a><br>Solution of all Chapters of SP<\/strong><br><strong> <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" rel=\"noreferrer noopener\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" rel=\"noreferrer noopener\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" rel=\"noreferrer noopener\">3<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" rel=\"noreferrer noopener\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" rel=\"noreferrer noopener\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" rel=\"noreferrer noopener\">6<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" rel=\"noreferrer noopener\">7<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" rel=\"noreferrer noopener\">8<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" rel=\"noreferrer noopener\">9<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" rel=\"noreferrer noopener\">10<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" rel=\"noreferrer noopener\">11<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" rel=\"noreferrer noopener\">12<\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q7_Answer_the_following\"><\/span>Q.7 Answer the following<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>1) Define Dividend and explain its features.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>The term dividend is derived from the Latin word \u2018Dividendum\u2019 which means \u2018that which is to be divided\u2019.<br>It is that part of the profits of the company which is distributed amongst its shareholders. Dividend is \u2018a share in distributable profits of the company to which the shareholder is entitled when it is formally declared by the company.\u2019<\/p>\n\n\n\n<p><strong>Definition:<br><\/strong>The Institute of Chartered Accountants of India has defined Dividend as, \u201ca distribution to shareholders out of profits or reserves available for this purpose.\u201d<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Following_are_the_features_of_Dividend\"><\/span>Following are the features of Dividend<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is the portion of profits of the company paid to its shareholders.<\/li>\n\n\n\n<li>It is payable out of the profits of the company.<\/li>\n\n\n\n<li>Dividend is an unconditional payment made by the company.<\/li>\n\n\n\n<li>Company can pay dividend only to the shareholders viz. (1) Equity (2) Preference.<\/li>\n\n\n\n<li>If the company has issued equity shares with differential rights as to dividend, the terms of issue of such shares will govern rights of shareholders about receiving the dividend.<\/li>\n\n\n\n<li>Dividend cannot be declared out of capital.<\/li>\n\n\n\n<li>Dividend can be declared only on recommendation of the Board of Directors.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Dividend as recommended by Board of Directors is approved and declared by a resolution passed at the Annual General Meeting by the shareholders.<\/li>\n\n\n\n<li>Dividend for any previous year cannot be declared once that year\u2019s Annual Account has been approved in the AGM.<\/li>\n\n\n\n<li>Dividend once approved and declared by shareholders creates a debt. It cannot be revoked.<\/li>\n\n\n\n<li>Dividend includes Interim Dividend.<\/li>\n\n\n\n<li>Dividend must be paid in cash and not in kind.<\/li>\n\n\n\n<li>Dividend is to be paid on paid-up value of shares.<\/li>\n\n\n\n<li>Dividend cannot be paid on calls paid in advance.<\/li>\n<\/ul>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>2) What is Interest? Explain its features.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>In financial terms, it is a payment made for using money of another. i.e. Borrower takes money from the lender.<br>So interest is the cost of renting money, for the borrower and it is the income from lending money for the lender.<\/p>\n\n\n\n<p>It is the return payable to the creditors of the company viz. Debenture holder \/ Deposit holders for the loan given by them to the company.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Following_are_the_features_of_Interest\"><\/span>Following are the features of Interest:<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>1) Interest is the price paid for the productive services rendered by capital.<br>2) It is directly related to risk. Higher the risk, higher is the interest.<br>3) Rate of Interest is expressed as annual percentage of Principal.<br>4) Rate of interest is determined b various factors like money supply, fiscal policy, volume of borrowings, rate of inflation etc.<br>5) Interest is a charge against the profit of the company. Even if company makes no profit, interest should be paid.<br>6) It is payable at a fixed and generally pre-determined rate.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>3) Discuss legal provisions for declaration of dividend.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>The dividend is that part of the profits of the company which is distributed amongst its shareholders. Dividend is a share in distributable profits of the company to which the shareholder is entitled when it is formally declared by the company.\u2019<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legal_Provisions_for_declaration_of_Dividend\"><\/span>Legal Provisions for declaration of Dividend<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p><strong>1) Board Meeting: <\/strong><\/p>\n\n\n\n<p>Dividend can be declared only on recommendation of Board of Directors. Board Meeting should be called to pass resolution about :<br>a) Rate of Dividend and amount of Dividend to be paid<br>b) Book closure date for dividend<br>c) Date of Annual General Meeting.<br>d) Bank with which a separate account should be opened to remit the dividend amount.<\/p>\n\n\n\n<p><strong>2) Shareholder&#8217;s Approval:<\/strong><\/p>\n\n\n\n<p>a) Dividend is approved by shareholders by passing an Ordinary Resolution at the Annual General Meeting.<br>b) Shareholders can declare a lower rate of dividend than what is recommended by the Board but not higher than that.<br>c) Once the dividend is declared at the General meeting it cannot be revoked. The company is not permitted to declare it second time in that year.<\/p>\n\n\n\n<p><strong>3) Separate Bank Account <\/strong><\/p>\n\n\n\n<p>The company must deposit the dividend amount in a separate bank account opened in a scheduled bank called as Dividend Account within 5 (Five) days of its declaration.<\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">Listed company:<\/span><\/strong> Where a company\u2019s shares are listed on the Stock Exchanges, additional requirements with respect to Listings agreements must be followed like.<br>a) Notify stock exchange where company&#8217;s securities are listed at least 2(two) days in advance of the date of meeting of the Board at which recommendation of final dividend is to be considered.<br>b) Intimate Stock Exchange immediately about declaration of dividend after the Board Meeting.<\/p>\n\n\n\n<p><br>c) Give notice of Book closure to the stock exchange at least 7(seven) working days before the closure.<br>d) Close the Register of members and the Transfer Register.<br>e) It must use electronic mode of payment such as Electronic Clearing Services (ECS) or National Electronic Fund Transfer (NEFT); as approved by the Reserve Bank of India (RBI)<br>f) Listed company has to express the dividend on per share basis only.<\/p>\n\n\n\n<p><strong>4) Prohibition to Pay Dividend<\/strong><\/p>\n\n\n\n<p>a) A company that has failed to repay deposit or interest on deposit cannot declare any dividend on its equity shares.<br>b) No dividend can be declared if company has defaulted on :<br>1) Redemption of Debentures or payment of interest, Redemption of Preference shares, payment of interest to financial institution, etc.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>4) Explain Interim Dividend.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>Dividend declared by the Board of Directors between two Annual General Meetings is called Interim Dividend. Interim dividend is paid in the middle of the accounting year i.e. before the finalization of annual accounts for the year. Opinion of the company\u2019s Auditors should be taken before declaring Interim Dividend.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_Interim_Dividend\"><\/span>Features of Interim Dividend<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Board of Directors has the power to declare Interim Dividend.<\/li>\n\n\n\n<li>Interim Dividend is only a payment on account of the whole dividend for the year.<\/li>\n\n\n\n<li>Company should provide depreciation for the entire year and not proportionately for a part of the year before declaring Interim Dividend.<\/li>\n\n\n\n<li>Interim dividend cannot be paid out of any reserves.<\/li>\n\n\n\n<li>Articles of Association of the company must authorize the Board of Directors to declare Interim Dividend.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Board Meeting has to pass a resolution for declaring the Interim Dividend.<\/li>\n\n\n\n<li>The amount to be given as Interim Dividend must be credited in a separate Bank account in a scheduled bank within 5 days of its declaration.<\/li>\n\n\n\n<li>Interim Dividend should be paid within 30 days of its declaration.<\/li>\n\n\n\n<li>Unpaid \/ Unclaimed Interim Dividend should be transferred to \u2018Unpaid Dividend Account within 7 days of the expiry of 30 days of declaration i.e. 37 days of its declaration.<\/li>\n\n\n\n<li>Any amount remaining unpaid\/unclaimed in the \u2018Unpaid Dividend A\/c\u2019 for 7 years should be transferred to IEPF.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" target=\"_blank\" rel=\"noreferrer noopener\">Balbharti Textbook Solutions for other subjects<\/a><br><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions\/\">Solution of all Chapters of SP<br><\/a> <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" target=\"_blank\" rel=\"noreferrer noopener\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" target=\"_blank\" rel=\"noreferrer noopener\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" target=\"_blank\" rel=\"noreferrer noopener\">3<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" target=\"_blank\" rel=\"noreferrer noopener\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" target=\"_blank\" rel=\"noreferrer noopener\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">6<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">7<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">8<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">9<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">10<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" target=\"_blank\" rel=\"noreferrer noopener\">11<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" target=\"_blank\" rel=\"noreferrer noopener\">12<\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"12th_Commerce_SP_Textbook_Solution\"><\/span>12th Commerce SP Textbook Solution<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Chapter Name <\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-chapter-1\/\">1) Introduction to Corporate Finance<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-sp-textbook-solutions-chapter-2\/\">2) Sources of Corporate Finance<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-3-solutions\/\">3) Issue of Shares<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-4-exercise\/\">4) Issue of Debentures<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-5-exercise-deposits\/\">5) Deposits<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-6-solution\/\">6) Correspondence with Members<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-7-solution\/\">7) Correspondence with Debentureholders<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-8-solution\/\">8) Correspondence with Depositors<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-9-solution\/\">9) Depository System<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-10-solution\/\">10) Dividend Interest<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-11-solution\/\">11) Financial Market<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-sp-chapter-12-solutions\/\">12) Stock Exchange<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Check_out_other_posts_related_to_the_12th_Commerce\"><\/span>Check out other posts related to the 12th Commerce<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/www.youtube.com\/@Scholarszilla\" data-type=\"link\" data-id=\"https:\/\/www.youtube.com\/@Scholarszilla\" target=\"_blank\" rel=\"noopener\">12th Commerce Video Lectures<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-notes\/\">Textbook Solutions of 12th Commerce (All Subjects)<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/ebalbharti-12th-books-pdf\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/ebalbharti-12th-books-pdf\/\"> Free PDF of 12th Commerce Textbooks <\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/hsc-it-online-exam\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/hsc-it-online-exam\/\">12th Commerce IT MCQ Preparation (Online Test)<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/new-paper-pattern-of-12th-commerce\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/new-paper-pattern-of-12th-commerce\/\"> Free PDF of 12th Commerce Textbooks <\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/sample-question-paper-for-12th-commerce\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/sample-question-paper-for-12th-commerce\/\">Sample Paper of 12th Commerce for Practice PDF<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-navneet-practice-papers-pdf\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/12th-commerce-navneet-practice-papers-pdf\/\">PDF of Solved Sample papers of 12th Commerce to improve Paper Presentation<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/hsc-previous-year-question-paper\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/hsc-previous-year-question-paper\/\">Old Question Papers of 12th Commerce with solution (All Subjects)<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><br><br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":10068,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[3438],"class_list":["post-9341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hsc-maharashtra-board","tag-12th-sp-chapter-10-solution"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/9341","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=9341"}],"version-history":[{"count":8,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/9341\/revisions"}],"predecessor-version":[{"id":39682,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/9341\/revisions\/39682"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/10068"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=9341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=9341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=9341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}