Divisible profit should not include
a) Interest on capital
b) Capital
c) Depreciation
d) None of the above
Answer: (d) Divisible profits should not include capital profits i.e., the profits of extraordinary nature (non-recurring profits) or profits arising from revaluation or sale of fixed assets or redemption of fixed liabilities. Dividends cannot be declared except out of divisible profits.
More MCQ and Answers on Auditing
- A vacancy caused by resignation of the auditor is filled by
- A company auditor can be removed before expiry of his term by
- Remuneration of a company auditor is fixed by the
- A company auditor, in general has to submit his report to
- An auditor of Government company has to submit his report to the
- Internal auditor has to submit report to
- Auditor should be dutiful like a
- Auditor, in general is an
- Which of the following percentage of nominal amount of shares should be received with application
- While checking allotment, auditor should see that amount