Which One of the Following Statements Related to an Income

question 30

Multiple Choice

Which one of the following statements related to an income statement is correct? Assume accrual accounting is used.

• A)The addition to retained earnings is equal to net income plus dividends paid.
• B)Credit sales are recorded on the income statement when the cash from the sale is collected.
• C)The labor costs for producing a product are expensed when the product is sold.
• D)Interest is a non-cash expense.
• E)Depreciation increases the marginal tax rate.

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Definitions:

Goal Shielding

The cognitive process of maintaining focus on a goal by avoiding distractions and disregarding irrelevant information or activities.

Committed

Describes a state of being dedicated or loyal to a cause, activity, or mission.

Duplex Mind

A concept suggesting the mind has two different processing systems, one automatic and unconscious, and the other deliberate and conscious.

Automatic System

A cognitive system that operates quickly and without conscious effort, responsible for fast and intuitive reactions and judgements.