If All Preferred Dividend Payments That Have Been Missed Must

question 18

Multiple Choice

If all preferred dividend payments that have been missed must be paid before any common stock dividend can be paid,the preferred stock is called ________ preferred stock.

• A)cumulative
• B)participating
• C)nonparticipating
• D)voting
• E)dual class

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Definitions:

Trading Securities

Financial instruments that are bought and sold for the purpose of generating profit from short-term price movements.

Fair Value Method

An accounting strategy used to assess the current market value of an asset or liability rather than its historical cost.

Unrealized Loss

A loss that has occurred on paper due to a decrease in the value of an investment or asset, but has not been realized through a transaction.

Fair Value Adjustment

A process of adjusting the book value of an asset or liability to reflect its current market value, used in accounting to ensure the fair presentation of financial statements.