Preference Dividends in Arrears Are Not a Liability Until Declared

question 66

True/False

Preference dividends in arrears are not a liability until declared by the Board of Directors, but should be disclosed in the notes to the financial statements.

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Definitions:

Prepaid Workers' Compensation Insurance

An asset account that represents insurance payments made in advance for workers' compensation, which provides coverage for employee injuries on the job.

Workers' Compensation

Insurance providing wage replacement and medical benefits to employees injured in the course of employment.

Gross Payroll

Gross payroll represents the total amount of money a business owes to its employees before any deductions, such as taxes and other withholdings, are made.

Injury

Physical harm or damage to a person's body, often resulting from accidents or violence.