Dividends in Arrears on Cumulative Preference Shares

question 148

Multiple Choice

Dividends in arrears on cumulative preference shares

• A) are shown in equity in the statement of financial position.
• B) must be paid before ordinary shareholders can receive a dividend.
• C) should be recorded as a current liability until they are paid.
• D) enable the preference shareholders to share equally in corporate earnings with the ordinary shareholders.

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Definitions:

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