YZ Company Has $20,000 of Dividends in Arrears

question 26

Multiple Choice

YZ Company has $20,000 of dividends in arrears.Based on this information, which of the following statements is false?

• A)Dividends in arrears are not considered to be liabilities.
• B)An obligation for dividends in arrears exists only after the board of directors declares payment.
• C)The investment community looks favorably on companies with dividends in arrears since the money is redirected toward more important growth opportunities.
• D)The amount of dividends in arrears should be disclosed in the notes to the financial statements.

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Definitions:

Analogical Representation

A form of cognitive representation where one idea, situation, or aspect is understood in terms of its similarity to another.

Satellite Weather Map

A graphical representation of meteorological data collected from satellites, showing weather patterns and conditions over large geographic areas.

Directed Thinking

Focused, goal-oriented thought processes that aim to solve specific problems.

Reason

The mental capacity to form conclusions, judgments, or inferences from facts or premises, often considered the foundation of rational thought.