Ch # 9.
Distribution of profits Page 253
1. The amount of final dividend is proposed by directors and approved by
(a) Members in AGM of the company
(b) Auditors in AGM of the company
(c) CEO in BOD meeting of the company
(d) Members in EGM of the company
2. Interim dividend may be proposed and paid before the end of the year by the
(a) Directors of the company
(b) Chairman of the company
(c) Chief Executive of the company
(d) None of the above
3. The dividend is proposed by the directors. The members may
(a) Reduce the dividend
(b) Accept the dividend
(c) Reject the dividend
(d) All of the above
4. Dividend warrants are a type of a crossed cheque and can be credited in to bank account of
(a) Creditor of the company
(b) Auditor of the company
(c) Member of the company
(d) Director of the company
5. Who is responsible in case of default regarding payment of dividend to member?
(a) Director Finance of the company
(b) BOD of the company
(c) CEO of the company
(d) Chairman of the company
6. In any case, the members of the company cannot
(a) Reject the amount of dividend proposed by directors
(b) Accept the amount of dividend proposed by directors
(c) Decrease the amount of dividend proposed by directors
(d) Increase the amount of dividend proposed by directors
7. In case of delay in payment of dividend, Chief executive of the company may be imprisoned for a
term not exceeding two years and he may be fined for an amount
(a) Upto Rs. 50 million
(b) Upto Rs. 5 million
(c) Minimum Rs. 5 million
(d) Minimum Rs. 50 million
8. In case of default regarding period of payment of dividend, Chief executive of the company will be
fined and imprisoned for a term which may extend to two years. He shall further be ineligible to
become a director or chief executive of
(a) Any company for the next five years
(b) Any company for the next ten years
Ch # 9. Distribution of profits Page 254
(c) Any holding company for the next five years
(d) Any subsidiary company for the next ten years
9. After declaration of dividend it should be paid within
(a) 14 days
(b) 21 days
(c) Such number of days as may be specified
(d) 45 days
10. When the dividend is declared at the annual general meeting of the company, it is known as ________.
(a) Final dividend
(b) Interim dividend
(c) Dividend to equity shareholders
(d) Dividend to preference shareholders
11. Dividend is payable to _____________
(a) Registered shareholder
(b) Order of registered shareholders
(c) Banker of shareholder
(d) Any of the above
12. Dividend shall be declared or paid by a company for any financial year only ____________
(a) Out of the profits of the company for that year
(b) Out of the profits of the company for any previous financial year or years
(c) Out of money provided by the central government or a state government for the payment of
dividend by the company
(d) All of the above
13. When the board of directors declare dividend anytime between two annual general meetings of the
company, such dividend is known as ______________.
(a) Final dividend
(b) Interim dividend
(c) Dividend to equity shareholders
(d) Dividend preference shareholders
14. If a company fails to pay declared dividend within specified time, CEO of the company shall, if he is
knowingly a party to the default, be punishable with imprisonment which may extend to _____ years.
(a) 10
(b) 2
(c) 5
(d) 7
15. YOGO Limited, a listed company having business of manufacturing of Plastic, sale its 5 piece of land
and gain from this disposal is Rs. 35 million on 21th July 2019. The Company want to declare the
interim dividend from this gain. As per The Companies Act 2017, advice the company whether it
can declare?
(a) Yes
(b) No
(c) Partly Yes
(d) Partly no
Ch # 9. Distribution of profits Page 255
16. YOYO Limited, a listed company having business of sale and purchase of land, sold its 5 pieces of
land and gain from this disposal is Rs. 35 million on 21th July 2019. The Company want to declare
the interim dividend from this gain. As per The Companies Act 2017, advice the company whether
it can declare?
(a) Yes
(b) No
(c) By passing ordinary resolution
(d) Only after passing special resolution
17. For withholding of dividend prior approval of __________ is required
(a) Members
(b) Directors
(c) Commission
(d) Registrar
18. Approval of Commission (for withholding dividend) shall be taken within _______ Days of declaration
(a) 30
(b) 15
(c) 21
(d) 45
19. There would be no offense if Dividend cannot be paid due to
(a) Operation of law
(b) If instructions are given by member
(c) If there is some amount which is recoverable from member
(d) All of the above
20. Mr. Shoaib is a shareholder of O Limited. Company announce interim dividends and the amount,
which will be paid to Mr. Shoaib is R. 50,000. 2 months ago, Mr. Shoaib purchase stationary products
from the company of Rs. 45,000 on credit and not paid yet. As Per the Companies Act 2017, Total
amount which is to be paid to Mr. Shoaib is Rs. __________.
(a) 45,000
(b) 50,000
(c) 95.000
(d) 5.000
21. The chief executive officer of every company is responsible to make the payment of final cash
dividend within a period of from the date of its declaration.
(a) 30 calendar days
(b) 30 working days
(c) 10 calendar days
(d) 10 working days
22. A company may, on giving not less than previous notice close its register of members, for any
period or periods not exceeding in the whole in each year.
(a) 7 days and 14 days
(b) 7 days and 30 days
(c) 15 days and 30 days
(d) 15 days and 45 days
Ch # 9. Distribution of profits Page 256
23. Any dividend payable in cash by a listed company may be paid:
(a) only through electronic mode directly into the bank account designated by the entitled
shareholders
(b) by cross cheques issued in the name of the entitled shareholders
(c) by dividend warrant at the registered address of entitled shareholders
(d) in any of the above manner at the discretion of the distributing company
24. Peach Limited’s board in its meeting held on 9 September 2022 has approved an interim cash
dividend of 20% i.e. Rs. 2 per share for the year ending 30 June 2023. The dividend shall be deemed
to have been declared on the date:
(a) of intimation to Pakistan Stock Exchange
(b) on which such dividend is approved by the board
(c) of the next general meeting
(d) on which announcement is made to the public
25. Following information are available in respect of Pear Limited for the year ended 30 June 2022:
Rs. in million
Unappropriated profit brought forward 100
Profit from principal line of business for the year 300
Gain/(loss) on disposal of land(s) situated at:
Multan 150
Jhelum (350)
Following is the maximum amount of dividend the board could recommend to the members for the
year ended 30 June 2022:
(a) Rs. 100 million
(b) Rs. 200 million
(c) Rs. 300 million
(d) Rs. 400 million
Ch # 9. Distribution of profits Page 257
Sr. No. Answer Sr. No. Answer Sr. No. Answer
1 A 11 D 21 D
2 A 12 A 22 B
3 D 13 B 23 A
4 C 14 B 24 B
5 C 15 B 25 B
6 D 16 A
7 B 17 C
8 A 18 D
9 C 19 D
10 A 20 D
