The difference between cumulative and noncumulative preferred stock is that cumulative preferred stock dividends that are not paid in a given year become a liability called Cumulative Preferred Dividends Payable. the number of cumulative preferred stock shares accumulates over the years based on a multiple of the number of shares owned. holders of noncumulative preferred stock do not have the right to be paid dividends from a given year if no dividends are declared on the preferred stock in that year. There is no practical difference between cumulative and noncumulative preferred stock.