Final answer:
It is false that dividends paid on ordinary shares should be included in the profit or loss statement; they are recorded in the statement of changes in equity and reflect the portion of company profits distributed to shareholders.
Step-by-step explanation:
The statement that dividends paid on ordinary shares should be included in the statement of profit or loss and other comprehensive income is false. Dividends are distributions of a portion of a company's earnings to its shareholders, and they are not included as an expense in the profit or loss statement because they are not incurred in the process of generating revenue. Dividends paid are typically recorded in the statement of changes in equity and not in the comprehensive income statement.
When a company issues dividends, it essentially returns a percent of the profits back to its shareholders. The dividend per share is multiplied by the number of shares a person or entity owns to calculate the total dividend received. Stable companies known for distributing dividends include those with long-standing operations and consistent profitability, such as utilities and consumer goods corporations.