When a Dividend Paid to Stockholders Who Own Mandatorily Redeemable

question 13

Multiple Choice

When a dividend paid to stockholders who own mandatorily redeemable preferred stock, the company must report the dividend

• A) As an adjustment to retained earnings in its statement of owners' equity.
• B) As interest expense in the income statement.
• C) As a reduction to other comprehensive income.
• D) In the financing activities section of the statement of cash flows.

---

Definitions:

Mass

Mass is a measure of the amount of matter in an object, typically in units such as kilograms or grams.

Material

The substance or mixture of substances that constitute an object or can be used to manufacture objects.

Density

A physical property defined as an object's mass per unit volume, indicating how compactly the mass is distributed in the object.