A Preference Share on Which the Right to Receive Dividends

question 42

Multiple Choice

A preference share on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

• A) Participating preference share.
• B) Callable preference share.
• C) Cumulative preference share.
• D) Convertible preference share.
• E) Noncumulative preference share.

---

Definitions:

Materials

Raw substances or components that are converted through the manufacturing process into finished goods.

Equivalent Units

A method in process costing that transforms units that are incomplete into an equivalent number of units that are considered fully completed.

Conversion Costs

Conversion costs are the combined costs of labor and overhead expenses required to convert raw materials into finished products.

Equivalent Units

Measures used in manufacturing to express the amount of work completed in terms of fully finished units during a given period.