Which of the Following Statements Is CORRECT

question 10

Multiple Choice

Which of the following statements is CORRECT?

• A) if a firm reports a loss on its income statement, then the retained earnings account as shown on the balance sheet will be negative.
• B) since depreciation is a source of funds, the more depreciation a company has, the larger its retained earnings will be, other things held constant.
• C) a firm can show a large amount of retained earnings on its balance sheet yet need to borrow cash to make required payments.
• D) common equity includes common stock and retained earnings, less accumulated depreciation.
• E) the retained earnings account as shown on the balance sheet shows the amount of cash that is available for paying dividends.

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Definitions:

Differential Specialization

The process by which different members of a society or group develop specific skills or functions to adapt and survive.

Left Hemisphere

The left side of the human brain, often associated with analytical tasks, language processing, and logic.

Evolutionary Psychologist

A professional in a field of psychology that studies how evolutionary principles help explain the origin and function of human psychological traits.

Natural Selection Pressures

Forces in the environment that influence the survival and reproductive success of organisms, leading to the evolution of traits that are better adapted to their environment.