Weekly Questions: Equity

Q1: For a company, what are the two main components, or parts, of equity in its balance sheet? Describe each of these two main components of equity for a company.

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Q2: How are reserves different to provisions?

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Q3: What is other comprehensive income?

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Q4: What are dividends?

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Q5: Why do listed companies ‘declare a dividend’ (ie announce their intention to pay a dividend) before they actually pay it? What don’t they simply pay a dividend in ‘one go’?

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Q6: How do we account for a company declaring a dividend?

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Q7: How do we account for a company when it actually pays the dividend to shareholders?

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Q8: How do we account for long-term investments that involve investing in the shares of other companies that are associated companies.

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Q9: How do we account for long-term investments that involve investing in the shares of other companies that are subsidiary companies?

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