Preferred Stockholders

question 266

Multiple Choice

Preferred stockholders:

• A)must receive dividends every year.
• B)have the right to receive dividends only in the years the board of directors declares dividends.
• C)have the right to receive dividends only if there are enough dividends to pay the common stockholders too.
• D)must receive more dividends per share than the common stockholders.

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Definitions:

Receivables Turnover Ratio

The Receivables Turnover Ratio measures how effectively a company collects its outstanding credit, calculated by dividing net credit sales by the average accounts receivable.

Notes Receivable

Financial assets representing amounts owed to a company, payable within a certain period.

Dishonoured

Pertains to a financial instrument, like a check or promissory note, that is not paid upon presentation due to insufficient funds or any other reason for non-payment.

Receivables Turnover Ratio

A financial metric that measures how effectively a company collects on its outstanding accounts receivable in a given period.