Preferred shares are least likely to have which of the following characteristics?A. Preference as to assets on liquidation of the corporation.B. Preference as to dividends.C. Extra liability for the preferred shareholders.D. The right of the holder to convert to common shares.

Preferred shareholders are usually entitled to dividend at a fixed rate.At the time of liquidation,…

Answered: Preferred shares are least likely to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.
The right of a shareholder to share proportionally in any new stock issue is called a/an ____________ right. Select one: a. coattail b. preemptive c. indenture d. secured e. charter
If the company decides to declare a share dividend instead of cash, explain the effects on the company's asset, liability and equity.
The ability of any stockholder to transfer stock to another person without the knowledge or the consent of the other stockholders and without disturbing the normal activities of the corporation is called a. unlimited life. b. suitability for large scale operations. c. taxation of corporate earnings. d. transferable ownership units.
1. The pre-emptive right of a common stockholder is the right to Choices; share proportionately in corporate assets upon liquidation. share proportionately in any new issues of stock of the same class. receive cash dividends before they are distributed to preferred stockholders. exclude preferred stockholders from voting rights. 2. In computing diluted earnings per share, interest expense on convertible bond payable should be Choices ignored Added back to net income net of tax Added back to net income at gross Deducted from net income net of tax Clear selection
What are dividends in arrears? How do they affect the allocation of dividends to preference and ordinary shareholder if: Preference share capital are noncumulative Preference share capital are cumulative
Which of the following statements correctly relate to ordinary shares? i) They represent an ownership interest.ii) Ordinary equity holders are the first to have their claims met in the event of the company going into administration.iii) As dividends are the return to the shareholders, they are paid out of operating profits before tax.iv) Control rights often differ between ordinary and other classes of share.
Which of the following statements about preferred shares is inaccurate? Select one: a. Preferred shares carry credit ratings. b. In the event of liquidation of a firm’s assets, preferred shareholders are paid out before common shareholders. c. Preferred share dividends are always cumulative. d. Preferred shares are often callable and puttable. e. Preferred share dividend income from another Canadian corporation is tax-exempt.
When a corporation’s earnings and dividends are exemplary good, which type of preference shares will yield the highest benefit for ordinary shareholders? * noncumulative, nonparticipating noncumulative, fully participating cumulative, nonparticipating cumulative, participating cumulative, partially participating
True or False: An S Corporation will not be treated as having more than one class of stock solely because of differences in voting rights (i.e. both voting and non-voting common stock).
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

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Preferred shares are least likely to have which of the following characteristics? A. Preference as to assets on liquidation of the corporation. O B. Preference as to dividends. C. Extra liability for the preferred shareholders. D. The right of the holder to convert to common shares.