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c. As an increase in the amount shown for common stock.
d. As an extraordinary item shown on the income statement.
42. Which of the following best describes a possible result of
treasury stock transactions by a corporation?
a. May increase but not decrease retained earnings.
b. May increase net income if the cost method is used.
c. May decrease but not increase retained earnings.
d. May decrease but not increase net income.
43. Which of the following features of preferred stock makes the
security more like debt than an equity instrument?
a. Participating
b. Voting
c. Redeemable
d. Noncumulative
44.
The cumulative feature of preferred stock
a. limits the amount of cumulative dividends to the par value of the
preferred stock.
b. requires that dividends not paid in any year must be made up in a
later year before dividends are distributed to common shareholders.