Preference Shares

question 59

Multiple Choice

Preference shares:

• A) have their dividend fixed at the issue date.
• B) rank behind ordinary shares in the payment of dividends.
• C) rank behind ordinary shareholders in their claim on company assets in the event of liquidation.
• D) rank ahead of the company creditors.

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Definitions:

Assets

Resources owned or controlled by a company that are expected to produce future economic benefits.

Net Income

The remaining profit of a company after expenses and taxes are taken out of its revenue.

Accrued Expense

Costs that have been incurred for goods or services but have not yet been paid for or recorded in the financial statements.

Accrued Revenues

Revenues that have been earned (through the delivery of goods or services) but not yet received in cash or recorded.