Which of the following is TRUE of dividends in arrears?
A)Dividends in arrears are a liability on the balance sheet.
B)Dividends in arrears are passed dividends on ordinary shares.
C)Dividends in arrears are passed dividends on non- cumulative preference shares.
D)Dividends in arrears are passed dividends on cumulative preference shares.

Question

Quizplus · Accepted Answer

Dividends in arrears refer to unpaid dividends on cumulative preference shares, which accumulate until they are paid. They are not considered a liability on the balance sheet until declared.

Which of the Following Is TRUE of Dividends in Arrears