Which of the Following Is Most Likely to Be a Considered

question 171

Multiple Choice

Which of the following is most likely to be a considered a growth stock?

• A) A company with a P/E ratio between 0 and 20.
• B) A company with a P/E ratio greater than 20.
• C) A company with a long history of stable dividend payments.
• D) A company with relatively high earnings per share.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Income Summary

Income summary is an account where revenues and expenses are accumulated to calculate net income or loss for a specific period before transferring to the capital account.

Temporary Account

An account used to accumulate transaction information during a single accounting period, which is then transferred to permanent accounts.