14. Dividends in arrears on cumulative preferred shares (a) never have to be paid, even if common dividends are paid. (b) must be paid before common shareholders can receive a dividend. (c) should be recorded as a current liability until they are paid. (d) enable the preferred shareholders to share equally in corporate profits with the common shareholders

14. Dividends in arrears on cumulative preferred shares (a) never have to be paid, even if common dividends are paid. (b) must be paid before common shareholders can receive a dividend. (c) should be recorded as a current liability until they are paid. (d) enable the preferred shareholders to share equally in corporate profits with the common shareholders

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Explain the relationship between dividends and earnings and profits. (pick one answer) Question content area bottom Part 1 A. Distributions are always nontaxable to shareholders. Distributions in excess of earnings and profits are treated as a nontaxable addition to capital. Distributions in excess of the basis of the stock are treated as capital gain. B. Distributions are taxable to shareholders as dividends only to the extent they are made from either current or accumulated earnings and profits. Distributions in excess of earnings and profits are treated as a nontaxable recovery of capital. Distributions in excess of the basis of the stock are treated as capital gain. C. Distributions are taxable to shareholders as dividends only to the extent they are made from current earnings and profits. Distributions in excess of earnings and profits are treated as a taxable recovery of capital. Such distributions increase the shareholder's basis in the…
A major difference between common and preferred stock Seleccione una: a. is that common stockholder have voting rights and preferred stockholders do not. b. is In the case of liquidation after a bankruptcy, common stockholder will be paid before preferred stockholders. c. is that preferred stockholder have voting rights and common stockholders do not. O d. is that common stock have a fixed dividend and preferred stock does not pay a dividend.
which of the following may be revoked by the board of directors after it has been declared? a) A share dividend b) An equitable distribution. c) a property prescription. d) a cash dividend
Stock dividends and stock splits are similar in that both do not change total stockholders’ equity. (True/False) A company must accrue a liability for sick pay that accumulates but does not vest. (True/False) A company may exclude a short-term obligation from current liabilities if the firm can demonstrate an ability to complete a refinancing. (True/False) Federal income taxes should be included in an employer’s payroll tax expense. (True/False) Whether an employee earns $80,000 a year or $800,000 a year, all of the earnings will be subject to Medicare deductions. (True/False) To record compensated absences as a liability GAAP establishes four criteria. The employer needs to meet any two of these four criteria in order to recognize a liability for compensated absences. (True/False) Stock dividends and stock splits both cause the number of shares outstanding to increase and retained earnings to decrease. (True/False)
None