Which of the Following Statements Is CORRECT

question 32

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 during the current year, this will increase its reported 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:

Consumption Bundle

A set of goods or services that an individual considers purchasing, given their income and the prices of those goods/services.

Indifference Curves

Graphs representing different combinations of goods that give a consumer equal levels of satisfaction, thereby indicating their preferences.

Bundle

A combination of different goods or services that are sold together as a single package.

Indifference Curves

Graphical representations in microeconomics that show combinations of two goods among which a consumer is indifferent, meaning they have no preference for one combination over the other.