The Preemptive Right Is the Right of Preferred Shareholders To

question 72

Multiple Choice

The preemptive right is the right of preferred shareholders to:

• A) Actively participate in the company decision making process.
• B) Receive dividends before the common shareholders receive.
• C) Share proportionately in any new sale of shares.
• D) Share in the profits and losses of the company.
• E) None of the choices are correct.

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Definitions:

Rules Of Debit

Rules governing the increase or decrease in account balances within the double-entry bookkeeping system, where debits typically increase assets or expenses and decrease liabilities, equity, and revenue.

Credit Side

The right side of an accounting entry, indicating increases in liabilities, revenues, and equity, and decreases in assets and expenses.

Normal Balance

The side (debit or credit) on which increases to an account are recorded, depending on the type of account.

Liability Account

An accounting record that represents a company's legal debts or obligations that arise during the course of business operations.