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

  • A ordinary dividend
  • B preference dividend
  • C capital reserve
  • D general reserve

The correct answer is B. preference dividend

Preference dividend is a dividend that is allocated to and paid on a company's shares. If a company is unable to pay all dividends, claims to preferred dividends take precedence over claims to dividends that are paid on common basis.

Previous question Next question