Heidi Aurora Imports issued shares of the company's Class B stock. Heidi Aurora Imports should report the stock in the company's statement of financial position:
A) Among liabilities if the shares are mandatorily redeemable or redeemable at the option of the shareholder.
B) As equity unless the shares are mandatorily redeemable.
C) As equity unless the shares are redeemable at the option of the issuer.
D) Among liabilities unless the shares are mandatorily redeemable.

Question

Quizplus · Accepted Answer

According to accounting standards, Class B stock is classified as equity unless the shares are mandatorily redeemable. Since the question does not mention anything about mandatory redemption, it can be assumed that the shares should be reported as equity in the statement of financial position. Therefore, option B is the correct answer.

Heidi Aurora Imports Issued Shares of the Company's Class B