Cumulative preference dividends in arrears should be shown in a corporation's statement of financial position as
A)an increase in current liabilities.
B)an increase in equity.
C)a footnote.
D)an increase in current liabilities for the current portion and non-current liabilities for the long-term portion.

Question

Quizplus · Accepted Answer

Cumulative preference dividends in arrears are not recognized as liabilities until declared, so they are disclosed in the notes to the financial statements rather than on the face of the statement of financial position.

Cumulative Preference Dividends in Arrears Should Be Shown in a Corporation's