Which of the following statements regarding dividends in arrears is true?
A)Dividends in arrears do not appear on the balance sheet or require a journal entry.
B)Dividends in arrears are not disclosed to stockholders.
C)Dividends in arrears applies to common stock.
D)Dividends in arrears are legal liabilities.

Question

Quizplus · Accepted Answer

Dividends in arrears refer to unpaid dividends on cumulative preferred stock and are not recorded as liabilities on the balance sheet, nor do they require a journal entry until declared.

Which of the Following Statements Regarding Dividends in Arrears Is