Assertion (A): Proposed Dividend for current year is shown under ‘Other Current Liabilities’. Reason (R): Unclaimed Dividend is shown under ‘Other Current Liabilities’. In the context of the above two statements, which of the following is correct?

Question

KollegeApply · Accepted Answer

(A) is false, but (R) is true. Explanation: Proposed Dividend for the current year is not shown under ‘Other Current Liabilities’; instead, it is disclosed in the Notes to Accounts as a contingent liability since it is yet to be approved by shareholders. Therefore, the assertion (A) is false. However, Unclaimed Dividend is correctly classified under ‘Other Current Liabilities’ because it is a liability to be paid to shareholders who have not yet claimed their dividend. Hence, (R) is true and (A) is false.

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