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:

Employee Salaries

The monetary compensation paid to employees for their labor, typically on a monthly or yearly basis.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross profit, but before income taxes and interest are deducted.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity levels, allowing for more accurate budgeting in variable cost areas.

Spending Variance

The difference between the actual spending and the budgeted or planned amount, often examined to manage and control expenses.