Cumulative preferred dividends in arrears should be shown in a corporation's balance sheet as

a. an increase in current liabilities.

b. an increase in stockholders' equity.

c. a footnote.

d. an increase in current liabilities for the current portion and long-term liabilities for the

long-term portion.

Question

Business

Monique Brandt

9 January, 20:59

Cumulative preferred dividends in arrears should be shown in a corporation's balance sheet as

a. an increase in current liabilities.

b. an increase in stockholders' equity.

c. a footnote.

d. an increase in current liabilities for the current portion and long-term liabilities for the

long-term portion.

+3

Answers (1)

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Shyann Lucero · Answer 1

Answer: a footnote

Explanation: Cumulative preferred dividends refers to the dividends that are outstanding from the company's side. The company have the obligation to pay such dividends before any payment is made to the common stockholders of the company.

Although it is an obligation to the company, it is recorded in the footnotes of the balance sheet of the company for the year as it is considered as a secondary information.

Cumulative preferred dividends in arrears should be shown in a corporation's balance sheet asa. an increase in current liabilities.b. an increase in stockholders' equity.c. a footnote.d. an increase in current liabilities for the current portion and long-term liabilities for thelong-term portion.