An External Transaction Is an Exchange Within an Entity That

question 284

True/False

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

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Definitions:

Noncumulative Preferred Stock

A type of preferred stock where dividends are not accumulated if they are not declared.

Par Value

The face value of a bond or stock as stated by the issuer, which does not necessarily reflect its market value.

Preferred Stock

A category of corporate ownership that ranks above common stock in terms of asset claims and earnings, usually providing fixed dividend payouts.