How Should Cumulative Preferred Dividends in Arrears Be Shown on the Balance

Multiple Choice

How should cumulative preferred dividends in arrears be shown on the balance sheet?

A) as an increase in shareholders' equity
B) as an increase in current liabilities
C) as an increase in current liabilities for the amount expected to be declared within the
Next year, and as an increase in long-term liabilities for the balance
D) by note disclosure only