When Preference Shares Are Cumulative, Preference Dividends Not Declared in a Period

question 315

Multiple Choice

When preference shares are cumulative, preference dividends not declared in a period are

• A) considered a liability.
• B) called dividends in arrears.
• C) distributions of earnings.
• D) never paid.

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Definitions:

Interest Rate

The percentage of the principal amount charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage rate (APR).

Equivalent

Equal in value, amount, function, meaning, etc., to something else.

Preceding January

The January that occurred immediately before the current date or specified event.

Retail Store

A business establishment that sells goods and services directly to consumers, typically at a markup from wholesale prices.