Stock for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends is known as ________ stock.
A. cumulative preferred
B. noncumulative preferred
C. common
D. participating preferred
Answer: A
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Directional testing Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency. Give examples of directional testing for the existence and completeness assertions
Substantive tests include
a. examining the safety deposit box for stock certificates b. reviewing systems documentation c. completing questionnaires d. observation
Capitalizing an expenditure rather than recording it as a revenue expenditure:
A) impacts the total book value of plant assets reported on the balance sheet and the amount of net income reported during a period. B) impacts the total book value of plant assets on the balance sheet, but has no effect on the amount of net income reported during an accounting period. C) impacts the amount of net income reported during an accounting period, but has no effect on the total book value of plant assets on the balance sheet. D) has no impact on the book value of plant assets on the balance sheet or the amount of income reported on the income statement.
Credit cards are usually based on a(n) ____ account system.
A. installment B. open charge C. revolving D. a selective