when preference dividend or equity dividend is paid will it have the following 2 effects; added to determine net profit before extraordinary items and deducted from financing activities

Dear Student

Yes, you are correct, Whenever dividend is declared and paid it is added in operating activity and deducted in financing activity.

But please note that its not necessary that same amount is added to Operating activity and Deducted in Financing activity as it involves two transactions, i.e 
1. Dividend Declared (Which is debited to Statement of Profit and Loss) is added to Net profit. Whereas,
2. Dividend actually paid in cash is deducted in Financing activity.

There may be a difference in dividend declared and actually paid due to the unclaimed dividend if any, otherwise both the amounts to be added and deducted are generally same.


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Yes its absolutely correct.
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