Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A)Most companies see retained profits as the least likely source of finance.
• B)The law quite clearly specifies the size of the non-distributable portion of capital a firm must hold back.
• C)Preference capital redeemed by a company is always held in retained profits.
• D)A company is not allowed to acquire and hold its own shares.

---

Definitions:

Merchandise Inventory

The total value of a company's goods that are ready for sale to customers at any given time, including products bought for resale.

Accounts Payable

Liabilities representing amounts owed by an entity to suppliers or creditors for goods or services received but not yet paid for.

Multiple-Step Income Statements

A detailed financial statement that separates operating revenues and expenses from non-operating ones, showcasing multiple layers of profitability.

FASB

The Financial Accounting Standards Board, an organization responsible for establishing and improving financial accounting standards in the U.S.