Week 2 Discusion 1


write the answer for question#1 in one paragraph

for question 2 answer is there just write a peer review in one paragraph

1) How should a debt callable by the creditor be reported in the ­debtor’s financial statements?

2) Discuss the accounting treatment or disclosure that should be accorded a declared but unpaid cash dividend, an accumulated but undeclared dividend on cumulative preferred stock, and a stock dividend distributable


If dividends have been declared but not paid yet, then it should be categorized as “Dividend Payable” as a current liability. It s recognized as a current liability because usually, the dividends will be paid in the short term.

However, an undeclared dividend is not categorized as a liability under GAAP. It is usually disclosed on the footnote on the balance sheet.

Stock dividend distributable is used when dividend is paid in terms of common stock rather than cash. This is more commonly used by Vanguard. It is categorized as “Stockholder’s Equity” and not as a liability. It is not a liability since it is not paid using assets.