Which of the Following Statements About the Income Statement Is

question 210

Multiple Choice

Which of the following statements about the income statement is correct?

• A)Expenses are listed before revenues on the income statement.
• B)Revenues are listed before expenses on the income statement.
• C)The income statement is prepared after the balance sheet.
• D)Dividends are listed on the income statement.

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Definitions:

Discounted Payback

A method to evaluate the profitability of an investment by calculating the time it takes for the net present value of cash flows to equal the initial investment cost.

Required Return

The minimum expected return on an investment necessary to compensate for the risk taken by the investor, including the time value of money and inflation.

Payback

A method of investment appraisal that calculates the time needed for an investment to generate cash flows sufficient to recover the initial outlay.

Four Year Payback

A capital budgeting method that calculates the time required to recoup the initial investment in a project, specifically over a period of four years.