NABTEB Accounting 2020 Objective — Question 36

Question 36 of 50 from the National Business and Technical Examinations Board (NABTEB) Accounting 2020 Objective paper, with the correct answer and a full explanation.

An item that would be considered a first charge against profit in a company's account is

A. general reserve
B. capital reserve
C. ordinary dividend
D. preference dividendCorrect

Explanation

Preference shareholders' dividends are paid before any other shareholders, making them a first charge against profit.

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