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Section 20 of KCS Act on payments often interacts with dividends and bonuses. Which statement is most accurate?

ADividends and bonuses may be paid only out of net profits and after meeting statutory reserves and obligations

BDividends and bonuses can be paid out of any funds, regardless of profitability.

CStatutory reserves and obligations must be met after paying dividends and bonuses.

DDividends and bonuses are prohibited by Section 20 of the KCS Act.

Answer:

A. Dividends and bonuses may be paid only out of net profits and after meeting statutory reserves and obligations

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