Cumulative preferred stock gives its owners a right to be paid both the current and all prior periods' unpaid dividends before anypaid to common stockholders.True or FalseTrueFalse

Introduction: Cumulative preferred stock is one sort of preferred stock; a preferred stock normally…

Answered: Cumulative preferred stock gives its…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 2MC

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Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
Treasury stock is listed as a(n) __________ on the balance sheet. (a) current liability (b) current asset (c) deduction from stockholders equity (d) addition to stockholders equity
Use the same facts as in RE 16-3, but instead assume that Pickens declares and issues a 50% stock dividend when the stock is selling for 30 per share. Prepare the journal entry on the date of declaration to record Pickenss stock dividend.
Which of the following are not part of common equity? a. preferred stock c. retained earnings b. common stock d. treasury stock
Which of the following is not a characteristic that sets preferred stock apart from common stock? A. voting rights B. dividend payments C. transferability D. ownership
cummulative preferred stock confers the right to be paid both and all prior periods unpaid cash dividends before any dividend is paid to common stockholders true false
If a preferred stock is of the cumulative type, a. dividends cannot be passed if they are earned. b. unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common stockholders. c. dividends must be paid, and if not a liability is created. d.dividends must be paid on an equal basis with common stock, so long as earnings permit.
Which of the following statements regarding preferred stock is true? a.Dividends are guaranteed to preferred stockholders. b.Preferred stockholders have a lower chance of receiving dividends than common stockholders do. c.When only one class of stock is issued, it is called preferred stock. d.Cumulative preferred stock has a right to receive regular dividends that were not declared (paid) in prior years.
Which of the following statements is not true about preferred stock? A.The rate of dividend is usually fixed B.Stockholders' usually have a preference as to dividends C. Stockholders always have a voting right D. Stockholders' usually have a preference as to assets upon liquidation of the corporation
Which of the following statements(s) is (are) true regarding preferred stock? a. Preferred stock dividends are not a liability of the firm unless they are declared b. Preferred stock dividends are paid after dividends are paid to common stockholders c. Like bonds, preferred stocks have maturity d. Preferred stock does carry voting rights
Match each description with the characteristic of preferred stock that it best describes. A. Cumulative B. Noncumulative C. Nonparticipating D. Participating 1. Receives current and all past dividends before common stockholders receive any dividends. 2. Receives dividends exceeding the stated rate under certain conditions. 3. Not entitled to receive dividends in excess of the stated rate. 4. Loses any dividends that are not declared in the current year.
Identify whether stockholders’ equity would increase (I), decrease (D), or have no effect (NE) as a resultof each separate transaction Treasury shares of common stock are purchased.

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Cumulative preferred stock gives its owners a right to be paid both the current and all prior periods' unpaid dividends befor paid to common stockholders. True or False True False