As Seen on an Income Statement

question 19

Multiple Choice

As seen on an income statement:

• A)interest is deducted from income and increases the total taxes incurred.
• B)the tax rate is applied to the earnings before interest and taxes when the firm has both depreciation and
• Interest expenses.
• C)depreciation is shown as an expense but does not affect the taxes payable.
• D)depreciation reduces both the pretax income and the net income.
• E)interest expense is added to earnings before interest and taxes to get pretax income.

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Definitions:

Utilitarian

Pertains to the ethical doctrine that actions are right if they are useful or for the benefit of a majority.

Poverty

A socio-economic condition characterized by a lack of financial resources or means of subsistence, leading to inadequate access to basic needs such as food, water, and shelter.

Consequences

The results or effects that follow an action or decision.

Rightness

The quality of being morally correct, just, or honorable, often used to describe actions or decisions that conform to moral or ethical principles.