Which of the following statements is true when dividends are not declared on cumulative preferred stock?Select one:O a. The undeclared dividends are accrued as a liability.O b. The shareholders must be allowed to convert their shares to common stock.Oc. The undeclared dividends accrue interest until paid.d. The undeclared dividends are disclosed in a note to the financial statements.Clear my choice

Cumulative preference share means where the dividend in arrears of last year will also be paid.…

Answered: Which of the following statements is…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 14MC: Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a...

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Which of the following are not part of common equity? a. preferred stock c. retained earnings b. common stock d. treasury stock
Treasury stock is listed as a(n) __________ on the balance sheet. (a) current liability (b) current asset (c) deduction from stockholders equity (d) addition to stockholders equity
Stockholders are eligible for a dividend if they own the stock on the date ofa. declaration.b. record.c. payment.d. issuance.
Which of the following statement is false in regards to Share premium? a. It will be shown under equity section in the balance sheet b. It will be credited at the time of issue of new shares along with premium c. It cannot be distributed as dividend to the shareholders d. It can be distributed as dividend to the shareholders
Which of the following affects the total Shareholders’ Equity? a. Declaration of a scrip dividend b. Declaration of share split c. Appropriation of retained earnings d. Retirement of treasury shares
Preferred stock: a. Is always recorded as a liability. b. Is always recorded as part of stockholders’ equity. c. Can have features of both liabilities and stockholders’ equity. d. Is not included in either liabilities or stockholders’ equity.
Choose the incorrect statement below: A. Retained earnings are the funds contributed by shareholders in excess of par or stated value.B. Equity is defined as the residual interest in the assets of an entity after deducting all of the liabilities.C. Conversion of preference shares into ordinary shares directly affects retained earnings.D. The statement of changes in equity is a formal statement that shows the movements in the elements or components of the shareholders' equity.
a. Which of the following disclosures regarding stock is not required to be reported on the balance sheet or in the notes to the financial statements? the par value and the number of shares authorized, issued, and outstanding. preferred stock characteristics, including dividend rate. any dividends in arrears. a list of names of stockholders.
Which of the following statements about stock dividends is true? Multiple Choice O Stock dividends are reported on the statement of shareholders' equity. Stock dividends increase total shareholders' equity. Stock dividends decrease total shareholders' equity. Stock dividends are reported on the Income Statement.
When preparing the stockholders' equity section of the balance sheet, assume that the following accounts have normal balances. Which of these account balances would not be an addition to the Paid-In Capital section? Group of answer choices Common Stock (credit balance) Treasury Stock (debit balance) Paid-In Capital in Excess Par Common Stock (credit balance) Preferred Stock (credit balance)
Choose the correct.When an investor uses the equity method to account for investments in common stock, the investor’s share of cash dividends from the investee should be recorded as: a. A deduction from the investor’s share of the investee’s profits.b. Dividend income.c. A deduction from the stockholders’ equity account, Dividends to Stockholders.d. A deduction from the investment account(AICPA adapted)
Which one of the following statements about ordinary equity is correct? a. Shareholders have a residual claim to the firm's assets. b. Shareholders are repaid an ordinary share's value on the share's maturity date. c. Shareholders' return is always positive. d. Equity that is listed on the ASX must pay a dividend.

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