The issuance of preferred shares requires a:
A) debit to Share Capital, Preferred
B) credit to Share Capital, Preferred
C) debit to Retained Earnings
D) credit to Retained Earnings

Question

Quizplus · Accepted Answer

Preferred shares represent equity ownership in the company, therefore the issuance of preferred shares would result in a credit to Share Capital, Preferred. It would not affect Retained Earnings, as no profits or losses have been generated yet.

The Issuance of Preferred Shares Requires A