Which of the Following Is TRUE If a Corporation Shows

question 15

Multiple Choice

Which of the following is TRUE if a corporation shows a net loss on its income statement?

• A)The company may still have a net increase in cash.
• B)The company will not be able to sell stock.
• C)The company will not be able to pay dividends.
• D)The company may still have an increase in retained earnings.

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Definitions:

Standard Labor Hours

The preset amount of time that is expected to be required to complete a specific task or job under normal conditions.

Direct Labor Rate Variance

The cost associated with the difference between the actual rate and the standard rate paid for direct labor multiplied by the actual direct labor hours used in producing a commodity.

Actual Costs

The true amount of money spent on a project or activity, as opposed to estimated or budgeted costs.

Standard Costs

Standard costs are predetermined estimates of the cost to manufacture a single unit or a number of units of a product during a specific time period.