Which of the Following Statements About the Use of Financial

question 46

Multiple Choice

Which of the following statements about the use of financial statements is not correct?

• A)When choosing between a company that pays steady dividends and one that retains its earnings to support future growth,investors will always choose the company that pays steady dividends.
• B)Companies can develop reputations for honest financial reporting even when conveying bad news.
• C)Trends in a company's net income from year to year can provide clues about its future earnings,which can help investors to decide whether to buy stock in the company.
• D)Information in the notes to the financial statements can influence a user's interpretation of balance sheet and income statement information.

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