Which of the Following Statements Is CORRECT

question 34

Multiple Choice

Which of the following statements is CORRECT?

• A)Dividends paid reduce the net income that is reported on a company's income statement.
• B)If a company uses some of its bank deposits to buy short-term, highly liquid marketable securities, this will cause a decline in its current assets as shown on the balance sheet.
• C)If a company issues new long-term bonds to purchase fixed assets during the current year, this will increase both its reported current assets and current liabilities at the end of the year.
• D)Accounts receivable are reported as a current liability on the balance sheet.
• E)If a company pays more in dividends than it generates in net income, its retained earnings as reported on the balance sheet will decline from the previous year's balance.

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Definitions:

Tennessee Secondary School Athletic Association

An organization that sets the rules and standards for high school athletic competitions in the state of Tennessee.

State Action

Activities or policies undertaken by government bodies or officials in the course of their official duties.

Equal Protection

The constitutional guarantee that the same laws and regulations apply equally to all people, ensuring no individual or group is treated unfairly.

Constitutional Principle

Fundamental laws and rights defined in a constitution that guide the legal and governmental system of a nation.