Dividends in arrears are ________.
A) a liability on the balance sheet
B) passed dividends on noncumulative preferred stock
C) passed dividends on cumulative preferred stock
D) passed dividends on common stock

Question

Quizplus · Accepted Answer

Dividends in arrears refer to missed or passed dividends on cumulative preferred stock. This means that the company has not paid the expected dividends on its preferred shares. Dividends in arrears are considered a liability on a company's books, but not on the balance sheet. Therefore, the correct answer is C.

Dividends in Arrears Are ________