Which of the Following Is/are Not True Regarding the Classification

question 181

Multiple Choice

Which of the following is/are not true regarding the classification of redeemable preferred shares on the balance sheet?

• A)The classification of redeemable preferred shares on the balance sheet depends on the conditions for redemption.
• B)If only the issuing firm has the option to redeem, then the preferred shares are part of its liabilities.
• C)If the issuing firm must redeem the preferred shares (so-called "mandatory redemption"), either at a specified time or upon a specified condition certain to occur, the issuing firm treats the preferred shares as a liability.
• D)If the preferred shareholders have the option to require redemption, then the preferred shares appear between liabilities and shareholders' equity under U.S.GAAP.
• E)If the preferred shareholders have the option to require redemption, then the preferred shares appear as a liability under IFRS.

---

Definitions:

Selling Price

The cost at which a product or service is made available for purchase by a consumer.

Obsolete Desk Calculators

Desk calculators considered outdated or no longer in use due to advancements in technology.

Financial Advantage

A benefit or edge that gives superiority in financial terms or market position over competitors.

Materials Costs

The cost of raw materials and supplies used in the manufacturing of a product.