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:

Conflicts Of Interest

Situations where an individual's or organization's personal interests could potentially influence or appear to influence their decisions in their official capacity.

Supermajority Vote

A requirement that a motion must receive significantly more than a simple majority of votes, often two-thirds or three-quarters, to be approved.

Employee-Shareholder

An employee-shareholder is an employee who also holds shares in the company they work for, often benefiting from stock options or equity compensation plans.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.