Which of the Following Is Not an Advantage of a Company

question 128

Multiple Choice

Which of the following is not an advantage of a company using equity rather than debt to finance a project?

• A)Interest always takes more cash than does paying dividends.
• B)Dividends do not need to be paid.
• C)Equity does not need to be repaid whereas debt does.
• D)Interest and Dividends are tax deductible.

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Definitions:

Drawing

In accounting, refers to the withdrawal of cash or goods by the owner from a business for personal use.

Account Group

An account group is a categorization of individual financial accounts in the general ledger that helps organize and report financial information.

Owner's Equity

The portion of a company’s assets that belongs to the owners after liabilities have been deducted.

Supplies

Items that are used in the daily operations of a business or organization, often consumed in the process.