The Rate of Return on Common Stockholders' Equity Shows the Relationship

question 19

True/False

The rate of return on common stockholders' equity shows the relationship between net income available to common stockholders and their average common equity invested in the company.

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Definitions:

Vouchers Payable

Vouchers payable is an accounting term for records that detail the amounts owed by a business to its suppliers or vendors for goods or services received.

Liability Account

An accounting record of amounts owed to creditors, representing claims against the company’s assets.

Voucher System

A control process in accounting where vouchers are used to authorize and record transactions before payments are made.

Internal Control

Processes and procedures implemented by a company to safeguard assets, enhance the reliability of financial reports, and ensure compliance with laws and regulations.