Proposed dividend is shown as current liabilities in balance sheet but why do we show in p/l a/c?

Dear Student

The journal entry for the declaration of proposed dividend is passed through profit and loss account only, therefore it is shown in profit and loss account.

Journal entry:
Journal in the books 
Date Particulars    Debit   Credit 
  Profit and Loss A/c Dr.  xxx   
    To Proposed Dividend A/c      xxxx 
  (Being dividend proposed shall be paid on approval form shareholders)      


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