Which of the Following Statements Is Correct

question 23

Multiple Choice

Which of the following statements is correct?

• A)Income from operations increases when common stock is sold for more than par value.
• B)The accrual of research and development costs does not affect the net profit margin ratio.
• C)The payment of an accrued liability decreases total asset turnover.
• D)The declaration and payment of a cash dividend increases the return on assets ratio.

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Definitions:

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, homogenous products, and free entry and exit, leading to price determination purely by demand and supply.

Soybeans

A type of legume native to East Asia, widely grown for its edible bean, which has numerous uses including oil, animal feed, and as a food item.

P × q

The formula representing total revenue, where P is the price per unit and q is the quantity of units sold.

Homogeneous

Characteristics of products or services that are identical in quality and features, making them indistinguishable from one another in the eyes of consumers.