What does preferred dividends mean on the CPA exam?
Preferred dividends. Dividends owed to preferred shareholders before common receives anything. Subtracted from net income when computing earnings per common share.
Defined against ASC 260-10-45-11.
Which CPA exam sections use preferred dividends?
Preferred dividends appears in the BAR section of the CPA exam.
Other terms defined against ASC 260-10
- diluted earnings per share: Earnings per share computed as though every dilutive potential common share had been issued; antidilutive securities are excluded.
Related terms
- net income: What is left after every revenue and expense of the period, including tax and discontinued operations.
- equity method: Used when the investor can exercise significant influence, presumed at 20% or more of the voting stock.
- additional paid-in capital: Amounts received from shareholders above the par or stated value of the shares issued, reported as a separate equity caption.