Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 3 - No. 45)
When preference shares are not classified as equity:
The preference shareholder dividends are shown in the income statements, together with interest, among the finance expenses.
The preference share capital is stated in the balance of financial position as a non-current liability, alongside debentures and other long-term borrowed funds.
Both statements are correct
Both statements are incorrect
Explanation
Both of the statements are correct.
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