Harry bought preferred noncumulative stock on which there were no dividends declared for the year.The dividends that were not declared for the year will:
A) be paid the next year.
B) be paid upon the next declaration of dividends.
C) be paid out of the common stock dividend fund.
D) not be paid.

Question

Quizplus · Accepted Answer

Noncumulative preferred stock means that dividends do not accumulate and must be declared in order to be paid. Since no dividends were declared for the year, they will not be paid at a later time.

Harry Bought Preferred Noncumulative Stock on Which There Were No