QUESTION TRUE or FALSE Preferred Stock can be a complicated security. With the right complications Preferred Stock can be either a Liability or an Equity item. A Company can only have one class of Common Stock Dividends can be paid on both Common Stock and on Preferred Stock Non-controlling equity interests in a subsidiary are recorded in the Mezzanine section of the Balance Sheet. When Dividends are paid in Cash, the impact of recording the Dividend Declaration is to reduce the Retained Earnings account. If Dividends are Declared by not paid until some future date, the company records nothing on the Declaration date. In the traditional three steps for accounting for a Cash Dividend, there is no accounting entry on the Record Date if the Declaration Date precedes it and the Dividend Payment Date succeeds it. Book Value per share is a useless financial ratio because the Book Value must include the Accumulated Other Comprehensive Income account, which no one understands and even fewer people use. A best practice is to record separate Additional Paid In Capital accounts separately for the various activities in Common Stock issuance, Treasury Share reissuance and other transactions that impact Equity accounts. 1 2. 3 4 5 6 7 8 9 Comprehensive Income is the same as Net Income, which is often labelled 10 Earnings Holden