A Company Has Not Declared a Dividend on Its Cumulative

question 55

Multiple Choice

A company has not declared a dividend on its cumulative preference shares for the past three years.What is the required accounting treatment or disclosure in this situation?

• A)Record a liability for cumulative amount of preference shares dividends not declared.
• B)Disclose the amount of the dividends in arrears.
• C)Record a liability for the current year's dividends only.
• D)No disclosure or recognition is required.

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Definitions:

Time Utility

The value added to products or services by making them available when they are needed.

Good Or Service

Products offered in the market that can be either tangible (goods) or intangible (services) to satisfy consumer needs or wants.

Customers Want

The desires or needs that consumers express, which can influence their buying behavior and decisions.

Purchase

The act of acquiring goods or services in exchange for money.