Type of investment trust or mutual fund (unit trust) in which the dividend income (after paying income tax) is reinvested to increase the amount of investment (unit).
Life insurance policy provision which allows policy dividends to accumulate with the insurer for accruing interest. Also called accumulation At interest option.
Assigning profit to firm's capital reserve instead of distributing it as dividends. See also retained earnings.
Common stock (ordinary shares) issued to current stockholders of the firm in lieu of a dividend, to help them avoid paying income tax. Capital-gains tax, however, must be paid on such shares.
Amount of an investment plus the interest earned to date.
Income tax assessed on accumulated profits (see retained earnings) that exceed the limit specified in taxation regulations, unless justified by the firm's 'reasonable' needs. The onus is on the management to prove the reasonableness of its high reserves.
Capital fund of a non-profit organization, such as an association, charity, or club. Surpluses of income over expenditure are added to this fund, and deficits are withdrawn.
Dividend that is due to the holders of cumulative preferred stock (preference shares) in the current accounting period, but is being carried forward to the next accounting period. It is shown in the account books as a liability, until paid.
