We usually record preferred stock as equity and report it in the stockholders' equity section of the balance sheet just above common stock.

Question

Quizplus · Accepted Answer

This is generally true. Preferred stock is considered a type of equity and is usually reported in the stockholders' equity section of the balance sheet, above common stock. However, there may be some cases where preferred stock is recorded as a liability instead of equity, so it's important to consider the specific details of each situation.

We Usually Record Preferred Stock as Equity and Report It