The Conversion of Preferred Stock into Common Stock Requires That

question 27

Multiple Choice

The conversion of preferred stock into common stock requires that any excess of the par value of the common shares issued over the carrying amount of the preferred being converted should be

• A) reflected currently in income, but not as an extraordinary item.
• B) reflected currently in income as an extraordinary item.
• C) treated as a prior period adjustment.
• D) treated as a direct reduction of retained earnings.

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Definitions:

Vision

A statement or concept relating to the future direction or ultimate goals of an individual, organization, or company, expressing long-term objectives.

Values

Fundamental beliefs or standards of behavior that guide decisions and actions by expressing what is important and worthwhile.

Founding Team

The group of individuals who start a company, often bringing diverse skills and backgrounds to the venture.

Accelerator

An organization that provides tailored support in order to help new ventures scale and grow.