Analysis of Preferred Stock Uses

question 18

Multiple Choice

Analysis of preferred stock uses

• A)operating income (EBIT)
• B)earnings after dividends to common stock
• C)earnings after taxes
• D)earnings after interest but before taxes

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Definitions:

Income Summary

An accounting tool used to aggregate all income and expense accounts to determine net income or loss for a period.

Revenue

Income that a company receives from its normal business activities, usually from the sale of goods and services to customers.

Closing Entries

Closing entries are journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Withdrawal Account

An account that tracks the money taken out of a business by its owners for personal use.