If a preferred stock is of the cumulative type, a. dividends cannot be passed if they are earned.   b. unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common stockholders.

Q: A stock splita. has no effect on total stockholders’ equity.b. increases assets and stockholders’…

A: Answer:   Option a

Q: (I) A share of common stock in a firm represents an ownership interest in that firm. (II) Preferred…

A: Owners of the company:The company functions with the help of the management, However, they are not…

Q: Which of the following decreases total equity? A. A stock split B. Recording Revenue C. The…

A: A. A stock split: No change in total equity   B. Recording Revenue: Increase in total equity   C.…

Q: When additional shares of stock are issued, the earnings per share decreases (assuming no change in…

A: EPS are determined by dividing gains to equity owners by the aggregate number of equity shares…

Q: Indicate whether each of the following relates to equity (E) or debt (D) financing and whether…

A: Equity financing: Equity financing is the larger amount of long-term financing that can be raised…

Q: What does the additional paid-in capital account represent? a) The difference between the par and…

A: When a company issues fresh shares for a price more than the par value of a share, excess amount is…

Q: Which does not affect total shareholders’ equity? a. Stock dividend b. Scrip dividend c. Cash…

A: The dividend is paid to the shareholders from the retained earnings of the business.

Q: cummulative preferred stock confers the right to be paid both and all prior periods unpaid cash…

A: Introduction: Dividends: Dividends are owners profit. Dividends are given to shareholders of the…

Q: When stock dividends are distributed stock dividends distributable is decreased. retained earnings…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Which is not true of preference shares? *       A. Payment of dividends is mandatory if cumulative.…

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: When common stock is issued at an amount greater than par value, the difference between the par…

A: When common stock is issued for more than its par value, the difference between par value and…

Q: A stock split is a monetary transaction. Consequently, a company that splits its stock must make…

A: A stock split is when a company increases the number of its shares and reduces the stock price per…

Q: Treasury stock is a contra-shareholders' equity account and it shows the total dollar amount a…

A: Treasury stock denotes the shares the company keep on his own treasure after buy back or repurchase.…

Q: Which of the following statement is true about "Cumulative Stock Dividends in Arrears? Select all…

A: Cumulative stock dividend in arrears is dividend payable but not yet paid to preferred stock…

Q: Which of the following statements about stock dividends is not true? Stock dividend is the only…

A: Stock dividend is the payment of dividends in form of shares instead of cash.

Q: n stock appreciation right, decline in fair value of share shall be accounted as A. Loss and…

A: The prices of shares goes up and down and adjustment are to be done for that.

Q: The entry to record the issuance of common stock at a price above its par value includes a A) an…

A: Company means a form of business where the share holder invest money in business in form of shares…

Q: Which of the following is NOT a characteristic of an ordinary share? a) The dividends are at the…

A: Ordinary share is a common stock which gives ownership of the company.

Q: Which of the following dividends does not reduce total stockholders' equity? O Liquidating…

A: The dividend is declared to the shareholders from the retained earnings of the business. The…

Q: How would the declaration and subsequent issuance of a small stock dividend affect share capital and…

A: Small stock dividend means the issue of shares less than 25% of the total outstanding shares in the…

Q: Which of the following statements(s) is (are) false regarding preferred stock?   a. Preferred…

A: Preferred stock The type of shares that receive a fixed dividend from the company is known as…

Q: Which of the following is the reason that preferred dividends declared during the period are…

A: Identify the correct option: Earnings per share (EPS): The amount of net income available to each…

Q: If a company resells treasury stock at a loss, and that amount exceeds any balance in the treasury…

A: Answer.  Treasury stock is recorded at cost.  If traesury stock is purchased at loos then additional…

Q: Match each description with the characteristic of preferred stock that it best describes. A.…

A: Preferred stock: These stocks are somehow similar to the common stock but hold some privileges in…

Q: All of the following are correct regarding stock dividends except:   1) total stockholders’ equity…

A: A stock dividend is a payment to shareholders that consists of additional shares rather than cash.…

Q: If you short-sell a stock and it pays a dividend while your short sale is open, then O A. You are…

A: Short selling is the process where a broker sells borrowed shares with the expectation that the…

Q: The following statements are true regarding dividends. Which of the following is incorrect?   a)…

A: Dividend is the amount which is paid to the shareholders for investing their money into the shares.…

Q: 14) The declaration and issuance of a stock dividend: A) Does not change retained earnings or…

A: Accounting includes procedures such as gathering, recording, analyzing, summarizing, allocating,…

Q: Statement 1: Noncumulative preference dividends in arrears are not paid and not disclosed.…

A: Dividend is the amount which is paid to the shareholders of the entity in respect of their…

Q: It is not unusual for some company investments to carry cumulative dividend rights.    Which of…

A: Cumulative dividends : Cumulative dividends can be described as a right that the preference…

Q: . Treasury stock is presented on the balance sheet as an asset. a liability. a reduction to equity.…

A: Treasury stock refers to a method used by the organization to repurchase the issued stock. It is…

Q: The dividend to general unsecured creditors is the dividend rate declared on common stock multiplied…

A: The individuals or institutions that lend money to the company without any collateral security are…

Q: Which of the following statements is true when dividends are not declared on cumulative preferred…

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

Q: 1. Statement 1: A split up increases the number of shares held and decreases the cost per share.…

A: The stock split is defined as the process wherein any company divides its total number of shares…

Q: What is reflected in the additional paid-in capital account? a. none of the above b. Whichever is…

A: additional paid-in capital account is shown in liabilities  section of  balance sheet  under…

Q: Which of the following is a characteristic of preferred stock? A. Give voting rights to its owner.…

A: This is a statement that is accurate. One way in which preferred stock is comparable to an annuity…

Q: If common stock is issued for an amount greater than par value, the excess goes to what account? Oa.…

A: The common stock issued is to be presented  in balance sheet  under liabilities  section. It is to…

Q: PART A: Common stock has seniority relative to preferred stock. True False PART B: Issuance or…

A: Similar to bonds, preferred stocks are higher ranking than common stock. But, bonds have more…

Q: Which of the following would NOT be a right of a common stockholder?   1. Receive interest income…

A: The Commons Shareholders are an real owners of the company they have all rights to elect the board…