Question: Under GAAP, cumulative preferred dividends are reported as liabilities only after they have been declared by the corporations board of directors. For the following debate,

Under GAAP, cumulative preferred dividends are reported as liabilities only after they have been declared by the corporations board of directors. For the following debate, support your arguments by referring to the SFAC No. 6 definition of liabilities and the consequent characteristics of liabilities.

Argue that cumulative preferred dividends are liabilities, even if they are not declared.

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