To Prevent the Payment of a Larger Amount of Dividends

question 62

Multiple Choice

To prevent the payment of a larger amount of dividends than was authorised, the corporation should use:

• A) an outside independent disbursing agency.
• B) cheques which cannot be written for an amount in excess of a stated maximum amount.
• C) a separate imprest dividend account.
• D) all of the above

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Definitions:

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market devices, and other assets.

Retirement

The act of leaving one's job and ceasing to work, usually upon reaching a certain age or for health reasons, often marked by receiving pension or retirement savings.

Annual Withdrawal

Annual withdrawal often refers to the amount of money an individual elects to take out of an investment or savings account each year, potentially for retirement living expenses.

Trust Fund

A legal arrangement in which assets are held by a third party for the benefit of another party, often used for estate planning and to manage wealth.