Amounts received for the issuance of preferred shares should not be included in contributed capital,but should be shown on the statement of financial position as a separate classification of liabilities.

Question

Quizplus · Accepted Answer

Amounts received for the issuance of preferred shares should be included in contributed capital as they represent equity capital raised from shareholders. Preferred shares are a form of equity and not a liability, thus should not be shown on the statement of financial position as a separate classification of liabilities.

Amounts Received for the Issuance of Preferred Shares Should Not