Assume that a corporation's dividends are two years in arrears for its outstanding preferred stock. In the corporation's financial statements, these arrearages are:
A) Disclosed as a current liability in the balance sheet
B) Disclosed as a long-term liability in the balance sheet
C) Disclosed in the notes to the financial statements
D) Disclosed as a current liability (for the most recent arrearage) and a long-term liability (for the oldest arrearage) in the balance sheet
E) Not disclosed
Correct Answer:
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