What Effect Does an Accrued Revenue Adjustment Have on a Company's

question 70

Multiple Choice

What effect does an accrued revenue adjustment have on a company's net income?

• A) The adjustment decreases net income for the period.
• B) The effect of the adjustment cannot be determined with the information given.
• C) The adjustment has no effect on net income.
• D) The adjustment increases net income for the period.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends.

Common Stock

Equities, or equity securities, issued as ownership shares in a publicly held corporation. Shareholders have voting rights and may receive dividends based on their proportionate ownership.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

ROE

Equity Return, which is determined by dividing the net income by the equity of shareholders, is a method used to evaluate financial success.