Which of the Following Statements Is CORRECT

question 61

Multiple Choice

Which of the following statements is CORRECT?

• A) Since depreciation increases the firm's net cash provided by operating activities,the more depreciation a company has,the larger its retained earnings will be,other things held constant.
• B) A firm can show a large amount of retained earnings on its balance sheet yet need to borrow cash to make required payments.
• C) Common equity includes common stock and retained earnings,less accumulated depreciation.
• D) The retained earnings account as reported on the balance sheet shows the amount of cash that is available for paying dividends.
• E) If a firm reports a loss on its income statement,then the retained earnings account as shown on the balance sheet will be negative.

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Definitions:

Sale Proceeds

The total amount received from the sale of an asset or property.

Federal Law

Legislation enacted by the national government of a country.

Judgment Debts

Money that a court has ordered one party to pay another party as a result of a legal judgment.

Property Taxes

Taxes imposed by local governments on real estate based on the property's assessed value, used to fund public services.