Maybel Company has a March 31, 2019 year end. Which of the following should not be recorded as a current liability?
A)A deposit received from a customer for the February 2020 rent on a 1-year lease entered into on March 1, 2019.
B)Unpaid payroll taxes.
C)Dividends in arrears on preferred dividends.
D)Property taxes estimated and unpaid based on the prior year's municipal tax bill.

Question

Quizplus · Accepted Answer

Dividends in arrears on preferred dividends are not considered a liability until they are declared by the company's board of directors. Therefore, they should not be recorded as a current liability.

Maybel Company Has a March 31, 2019 Year End