A Simple Tool That Is Widely Used in Accounting to Represent

question 168

Multiple Choice

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

• A) Drawing account.
• B) Balance column sheet.
• C) Withdrawals account.
• D) Capital account.
• E) T-account.

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Definitions:

Dividends

Dividends are payments made by a corporation to its shareholder members, usually derived from the company's profits.

Constant Growth Model

A method to value a stock by assuming that dividends grow at a constant rate indefinitely.

Dividend Yield

The ratio of a company's annual dividend payments to its share price, indicating the earning potential from dividends for investors.

Required Return

An annual return rate set as the minimum to attract investment from persons or entities into a specific security or project.