A corporation records a dividend-related liability on the payment date. when dividends are in arrears. on...
A corporation records a dividend-related liability
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on the payment date. |
|
when dividends are in arrears. |
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on the record date. |
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on the declaration date. |
With an interest-bearing note, the amount of assets received upon issuance of the note is generally
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equal to the note's maturity value. |
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equal to the note's face value. |
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less than the note's face value. |
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greater than the note's face value. |
Ayayai Corp. has $20000 of dividends in arrears. Based on this information, which of the following statements is false?
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An obligation for dividends in arrears exists only after the board of directors declares payment. |
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The investment community looks favorably on companies with dividends in arrears, since the money is redirected toward more important growth opportunities. |
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Dividends in arrears are not considered to be liabilities. |
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The amount of dividends in arrears should be disclosed in the notes to the financial statements. |
Homework Answers
Ans 1 on the declaration date.
Ans 2 equal to the note's face value
Ans 3 The investment community looks favorably on companies with dividends in arrears, since the money is redirected toward more important growth opportunities.
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