Reserve and surplus
Contingent liabilities
Current liabilities
Provisions
Answer is Right!
Answer is Wrong!
The correct answer is D. Provisions.
Unclaimed dividends are amounts of dividends that have been declared by a company but have not been claimed by the shareholders. These amounts are usually shown as a separate line item on the company’s balance sheet under the heading of “Provisions”.
Provisions are liabilities that are not certain to arise, but are probable and have a measurable amount. They are usually created to cover potential losses or expenses that may occur in the future. In the case of unclaimed dividends, the company is likely to have to pay these amounts to the shareholders at some point in the future, so they are considered to be a liability.
The other options are incorrect because they do not represent liabilities.
- Reserves and surplus are equity accounts that represent the amount of money that is left over after all of the company’s liabilities have been paid.
- Contingent liabilities are potential liabilities that may arise in the future, but are not certain to occur.
- Current liabilities are liabilities that are due to be paid within one year.