If there are profits and the dividends on cumulative preference shares are in arrears, the arrears of dividends on preference shares held by the Minority shareholders should be :

CS Executive · Corporate and Management Accounting · PYQS · June 2024
If there are profits and the dividends on cumulative preference shares are in arrears, the arrears of dividends on preference shares held by the Minority shareholders should be :
(A) Credited to the Consolidated Profit and Loss Account and debited to the Minority Interest Account
(B) Debited to the Consolidated Profit and Loss Account and credited to the Minority Interest Account
(C) Debited to the Consolidated Profit and Loss Account and credited to the Capital Reserve Account
(D) Credited to the Consolidated Profit and Loss Account and debited to the Capital Reserve Account

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Corporate Accounting

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