Jensen Inc

question 11

Multiple Choice

Jensen Inc.has net earnings of $24,000,000 this year and a dividend payout policy of 40% of earnings.If the firm follows its regular payout policy what will be the addition to retained earnings this year?

• A)$9,600,000
• B)$12,000,000
• C)$14,400,000
• D)$16,000,000

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Definitions:

Revenues

The total income generated from the sale of goods and services before any expenses are subtracted.

Expenses

Economic costs that a company incurs through its operations to generate revenue, often categorized as operational, selling, and administrative expenses.

Revenue Account

A financial account that tracks the income generated from a company's business activities, such as sales or services provided.

Credited

A term used in double-entry bookkeeping to indicate a recording in the credit column, often signaling an increase in liabilities or a decrease in assets.