Which of the Following Statements Is False

question 31

Multiple Choice

Which of the following statements is false?

• A) A positive net income results in an increase in retained earnings.
• B) The ending retained earnings balance from the statement of retained earnings is reported on the balance sheet.
• C)The change in the cash balance on the statement of cash flows added to the beginning cash balance equals the ending cash balance.
• D)The dividends reported on the statement of retained earnings are also reported as dividend expense on the income statement.

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Definitions:

Spending Multiplier

The ratio of the change in total income to the initial change in spending that brought it about, illustrating how initial spending leads to further spending in the economy.

Expansionary Monetary Policy

A form of monetary policy where the central bank increases the money supply to stimulate economic activity, typically by lowering interest rates.

Aggregate Investment

The total amount of investment in goods and services within an economy over a specific period, including investments in business capital and residential construction.

Demand for Money

The desire to hold cash or easily liquidated financial instruments for transactions, precautionary, or speculative motives.