Which One of the Following Statements Is Correct Concerning a Statement

question 148

Multiple Choice

Which one of the following statements is correct concerning a statement of comprehensive income?

• A) Interest expense decreases the taxes owed by a firm.
• B) Net income is either paid out as dividends or added to the retained earnings of the firm.
• C) Depreciation increases the net income of a firm.
• D) Net income is equivalent to the operating cash flow of a firm.
• E) Taxes will increase the amount of a loss incurred by a firm with negative taxable income.

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Definitions:

Bonds

Fixed-income investments representing a loan made by an investor to a borrower, typically corporate or governmental, with terms defining the interest rate and maturity date.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding cost of goods sold (COGS).

Tax Liability

The total amount of tax that an individual or corporation is legally obligated to pay to an authority as the result of the occurrence of a taxable event.

Dividends Paid

Cash or other forms of payouts made by a company to its shareholders from its earnings.