Q.In a consumers co-operative society, the share of the surplus paid back to a member in proportion to the goods he has purchased during the year is called:

A consumers society returns its saving to members in two ways — on the shares they hold and on the purchases they make.

A dividend is paid on shares, but the amount tied to how much a member has bought is the patronage bonus.

A consumers co-operative society distributes its trading surplus (after reserves) in two forms. A dividend is paid on the shares a member holds, but the special co-operative device is the patronage bonus, paid in proportion to the purchases a member has made from the society during the year.

Option-by-option analysis:

• (a) Dividend on shares — Wrong. A dividend is calculated on shareholding, not on the value of goods bought.
• (b) Interest on deposits — Wrong. Interest is paid on money deposited, which is the work of a credit society, not a distribution based on purchases.
• (c) Patronage bonus — Correct. It is paid to each member in proportion to the goods he has bought, returning the saving to those who used the shop most.
• (d) Entrance fee — Wrong. An entrance fee is a small amount paid by a new member to join, not an amount paid to a member.

Do not confuse dividend (on shares) with patronage bonus (on purchases). The word 'patronage' means custom or purchases, which is the clue to the answer.