Question

The director are expected to declare a dividend of 19 million in March 2011... would the...

The director are expected to declare a dividend of 19 million in March 2011...

would the following statement be classified as cash disbursement in budget?

would depreciated be classified as cash disbursement in the budget??

Please explain briefly

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Answer #1

cash disbursement means outflow of cash.

Declaration of dividend does not involve outflow of cash. The amount is recorded through a liability account - dividend payable.

If it was payment of dividend - then there would have been an outflow of cash.

Therefore, The director are expected to declare a dividend of 19 million in March 2011 is not classified as cash disbursement in budget.

Similarly depreciation is also not classified as cash disbursement in budget as it is a non cash expenditure.

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