Which One of the Following Statements Is Correct Concerning a Corporation

question 35

Multiple Choice

Which one of the following statements is correct concerning a corporation with taxable income of $125,000?

• A)Net income minus dividends paid will equal the ending retained earnings for the year.
• B)An increase in depreciation will increase the operating cash flow.
• C)Net income divided by the number of shares outstanding will equal the dividends per share.
• D)Interest paid will be included in both net income and operating cash flow.
• E)An increase in the tax rate will increase both net income and operating cash flow.

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Definitions:

Long-Range Planning

The process of setting goals and developing strategies to achieve these objectives over an extended period.

Short-Term Goals

Objectives set by a business or individual that are intended to be achieved in a short period, typically less than one year.

Direct Labor Hours

The hours worked by employees directly involved in manufacturing a product or providing a service.

Direct Labor Budget

A financial plan that estimates the cost of direct labor needed to meet production goals, often detailed by departments or projects.