Common Stockholders _____________________________________

question 19

Multiple Choice

Common stockholders _____________________________________.

• A) usually benefit when a company is growing
• B) have the greatest security of any investor
• C) have a senior claim to the firm's assets during bankruptcy
• D) are guaranteed dividends based on the firm's annual profits

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to record revenues to the period they are earned and expenses to the period incurred.

Cost of Goods Sold

The expenses directly associated with the manufacturing of products a company sells, such as materials and labor.

Customer Returns

Goods or merchandise sent back to the retailer or manufacturer by the purchaser due to defects, dissatisfaction, or other reasons.

Accounting Equation

The core formula of double-entry accounting: Assets equal Liabilities plus Equity, which shows the link between a firm's assets and the stakes held in those assets.