Accumulated dividend

An accumulated dividend is a dividend on cumulative preferred stock that is due but has not yet been paid. This dividend is an obligation of the corporation, so it is recorded as a liability on the balance sheet until it is paid. These dividends must be paid before any other dividends can be paid out. Thus, the holders of cumulative preferred stock have a payment preference over the holders of non-cumulative preferred stock and common stock.

Related Courses

The Balance Sheet