Mandatorily redeemable preferred stock is reported on the balance sheet as

A) a liability.
B) an equity item.
C) a temporary investment.
D) a separate line between liabilities and shareholders' equity.

Mandatorily Redeemable

Describes financial instruments or securities that the issuer is obligated to buy back from holders at a predetermined date or upon the occurrence of certain events.

Preferred Stock

Preferred stock is a type of stock that affords its holders preferential payments of dividends or distributions, and often has priority over common stock in the event of a liquidation.

Liability

Refers to financial obligations or debts that a company or individual owes to others, which must be settled over time through the transfer of economic benefits.