JAMB - Accounts Principles Of Accounts (2025 - No. 55)

The class of share to which payment of dividend depends on profit is
preference shares
bonus shares
forfeited shares
ordinary shares

Explanation

Ordinary shares carry dividends that depend on the company’s profits and are not fixed. Forfeited shares are shares taken back by the company due to non-payment of calls. Bonus shares are free additional shares issued to existing shareholders. Preference shares carry a fixed dividend, which is paid before dividends on ordinary shares.

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