Preferred stock that must be redeemed by a corporation is reported as a(n)________ on the balance sheet.
A)component of stockholders' equity
B)contra account in stockholders' equity
C)liability
D)asset

Question

Quizplus · Accepted Answer

Redeemable preferred stock is considered a liability because it represents an obligation for the corporation to pay back the stockholders at a future date.

Preferred Stock That Must Be Redeemed by a Corporation Is