Which of the Following Statements Is Correct in Relation to the Payment

question 48

Multiple Choice

Which of the following statements is correct in relation to the payment of dividends?

• A) Dividends can only be paid if a company has generated a profit in the current period.
• B) The payment of dividends is regulated by the Corporations Act.
• C) A company can only pay an interim dividend if its constitution allows it.
• D) Preference dividends must be paid on a cumulative basis.

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Definitions:

Consolidated Cost Of Goods Sold

The total cost of goods that have been sold by a parent company and its subsidiaries, presented as a single figure in consolidated financial statements.

Intra-entity Transfers

Transactions that occur between two units within the same company, such as the transfer of goods or services from one department to another.

Consolidated Sales

The total sales revenue of a company and its subsidiaries combined, presented as a single figure in financial statements.

Gross Profit

Gross Profit is the financial gain obtained after deducting the cost of goods sold (COGS) from total revenue, indicating the efficiency of a company's core operations.