If Preferred Stock Is Cumulative the

question 2

Multiple Choice

If preferred stock is cumulative the

• A) preferred dividends not declared in a given year are called dividends in arrears.
• B) preferred stockholders and the common stockholders receive equal dividends.
• C) preferred stockholders and the common stockholders receive the same total dollar amount of dividends.
• D) common stockholders will share in the preferred dividends.

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Definitions:

Equivalent Units

Equivalent units are used in cost accounting to represent the amount of work done during a period, expressed in terms of fully completed units.

Direct Materials

These are the raw materials that are directly traceable and integral to the finished product in the manufacturing process.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor expenses.

Process Operations

Activities involved in the transformation of raw materials into finished products via chemical, physical, or other methods within industrial facilities.