Cullumber Discount Retail Company has $16,000 of dividends in arrears. Based on this information, which of the following statements is false?
- An obligation for dividends in arrears exists only after the board of directors declares payment.
- The investment community looks favorably on companies with dividends in arrears since the money is redirected toward more important growth opportunities.
- Dividends in arrears are not considered to be liabilities.
- The amount of dividends in arrears should be disclosed in the notes to the financial statements.