Received dividend of ₹ 1,200 by cheque. Explain accounting treatment

1.	Received dividend of ₹ 1,200 by cheque. Explain accounting treatment based on equation for this transaction.
Answer» Effects : (i) Bank is receiver → Bank balance (Asset) increases (ii) Dividend is an income → Capital increases Conclusion : → Assets and Capital have increased by the same amount of ₹ 1,200. → Thus, equation is satisfied.

Received dividend of ₹ 1,200 by cheque. Explain accounting treatment based on equation for this transaction.

Answer»

Effects :

(i) Bank is receiver → Bank balance (Asset) increases
(ii) Dividend is an income → Capital increases

Conclusion :

→ Assets and Capital have increased by the same amount of ₹ 1,200.
→ Thus, equation is satisfied.