The Difference Between the Cost of Funds Used to Finance

question 156

Multiple Choice

The difference between the cost of funds used to finance an investment and its after-tax operatingprofits is called

• A) economic value added.
• B) earnings per share.
• C) retained earnings.
• D) a dividend.

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Definitions:

Accounting Time Period

The span of time covered by financial statements, typically a fiscal quarter or year, during which all financial transactions are recorded and reported.

Quarter

A three-month period on the financial calendar that acts as a basis for periodic financial reporting and dividends.

Post-Closing Trial Balance

A summary of all accounts after closing entries are made, used to check the accuracy of closing entries and the balance of permanent accounts.

Adjusted Trial Balance

A list of all accounts and their final balances after all end-of-period adjusting entries have been made, used to prepare financial statements.