ACC 304 help A Guide to career/Snaptutorial ACC 304 help A Guide to career/Snaptutorial | Page 149

a. Management indicated that they are going to refinance the
obligation.
b. Actually refinance the obligation.
c. Have capacity under existing financing agreements that can be
used to refinance the obligation.
d. Enter into a financing agreement that clearly permits the entity to
refinance the obligation.
42. A company has not declared a dividend on its cumulative
preferred stock for the past three years. What is the required
accounting treatment or disclosure in this situation?
a. Record a liability for cumulative amount of preferred stock
dividends not declared.
b. Disclose the amount of the dividends in arrears.
c. Record a liability for the current year's dividends only.
d. No disclosure or recognition is required.
43. Which of the following situations may give rise to unearned
revenue?
a. Providing trade credit to customers.
b. Selling inventory.
c. Selling magazine subscriptions.
d. Providing manufacturer warranties.
44.
Which of the following statements is correct?