Which of the Following Is Not a True Statement

question 34

Multiple Choice

Which of the following is not a true statement?

• A) Common shareholders have a residual claim to income.
• B) Bondholders may force a corporation into bankruptcy for failure to make interest payments.
• C) Common shareholders are legally entitled to some dividend.
• D) A minority interest can still elect members to the board of directors under cumulative voting even though someone else owns 51% of the stock.

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Definitions:

Accounts Receivable

Funds that customers owe to a business for products or services they have received but have not yet paid for.

Uncollectible Accounts

Uncollectible Accounts are receivables that a company does not expect to collect and are thus written off as an expense for bad debts.

Extraordinary Loss

Unusual and infrequent losses that are not part of the ordinary activities of a business, such as losses from natural disasters.

Goodwill Impairment

A charge that occurs when the fair value of goodwill falls below its carrying value on the balance sheet, indicating that the asset is not generating the expected profits.