Which of the Following Is TRUE of Dividends in Arrears

question 6

Multiple Choice

Which of the following is TRUE of dividends in arrears?

• A)Dividends in arrears are a liability on the balance sheet.
• B)Dividends in arrears are passed dividends on non-cumulative preference shares.
• C)Dividends in arrears are passed dividends on ordinary shares.
• D)Dividends in arrears are passed dividends on cumulative preference shares.

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Definitions:

LIFO Reserve

The difference between the cost of inventory calculated using the Last In, First Out method and the First In, First Out method.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle.

LIFO

Last In, First Out, an inventory valuation method that assumes the most recently acquired items are sold first, affecting accounting and tax calculations.

FIFO

"First In, First Out," an inventory valuation method where goods first acquired are the first to be sold.