(2016 Books & Budget- Without Books -5 marks)
Differences
between
Dividend
|
Interest
|
1. It is the return paid by the
organisation to its owners/shareholders for the capital invested by them
|
1. It is the charge paid to the Lender
at specified rate and intervals , for the use of money.
|
2.
Appropriation of Profit. That
means it is distributed to the shareholders/owners only, if profit is
available.
|
2. Charge against Profit. That means irrespective of profit available
or not, it is an expense.
|
3. Paid to Shareholders/Owners
|
3. Paid to the
Lenders/Creditors/Debenture Holders
|
4. It is not fixed. It is depends on the available of profit
after charging all legitimate expenses and at the discretion of Management.
|
4. It is fixed and paid at regular
intervals as agreed mutually by the Lender & Borrower.
|
5. Not eligible for tax deduction
|
5.Eligible for tax deduction.
|
6. It is not a expense to the
Organization
|
6. It is an expense to the
Organization
|
7.There is no liability on the
Organization, If payment of Dividend is not made.
|
7. If payment of interest is not
made, the Organization will face legal consequences.
|
