Which of the following methods should be used to account for the conversion of preferred stock to common stock? $\begin{array}{lll}
& \text {Book Value}& \text {Market Value}\
\text { I. } & \text { Yes } & \text { No } \
\text { II. } & \text { Yes } & \text { Yes } \
\text { III. } & \text { No } & \text { Yes } \
\text { IV } & \text { No } & \text { No }
\end{array}$

A)I
B)II
C)III
D)IV

Question

Which of the following methods should be used to account for the conversion of preferred stock to common stock? $\begin{array}{lll}
& \text {Book Value}& \text {Market Value}\
\text { I. } & \text { Yes } & \text { No } \
\text { II. } & \text { Yes } & \text { Yes } \
\text { III. } & \text { No } & \text { Yes } \
\text { IV } & \text { No } & \text { No }
\end{array}$

A)I
B)II
C)III
D)IV

Quizplus · Accepted Answer

The book value method is typically used for accounting for the conversion of preferred stock to common stock, not the market value method. This approach reflects the conversion based on the company's accounting value rather than the current market price of the shares.

Which of the Following Methods Should Be Used to Account