A Business Reports the Following in Its Financial Statements Its Rate of Return on Shareholders' Equity Is:
A) 11

question 16

Multiple Choice

A business reports the following in its financial statements:
$$\begin{array} { l l } \text { Net profit before tax } & \$ 100 \\\text { Interest expense } & 20 \\\text { Income tax expense } & 30 \\\text { Preference dividends paid } & 10 \\\text { Ordinary dividends paid } & 15 \\\text { Total assets at the beginning of the year } & 750 \\\text { Total assets at the end of the year } & 850 \\\text { Total liabilities at the beginning of the year } & 3 7 5 \\\text { Total liabilities at the end of the year } & 4 2 5 \end{array}$$
Its rate of return on shareholders' equity is:

• A) 11.25%
• B) 15.0%
• C) 7.5%
• D) 22.5%

Knowledge of when to report income based on the cash receipts and disbursements method.

Recognize the tax implications of bartering services and the determination of taxable income in bartering transactions.

Understand the principles of constructive receipt and the conditions under which income is considered earned.

Grasp the definitions and tax treatment of fringe benefits, including insurance coverage and educational assistance.

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Definitions:

Gender Biased

Holding or showing prejudice, stereotypes, or favoritism towards one gender over others.

Intellectual Disability

"A condition of limited mental ability in which an individual has a low IQ, usually below 70 on a traditional intelligence test, and has difficulty adapting to everyday life."

Limited Mental Ability

A state or condition where an individual's cognitive functions are below average and restrict daily activities and learning capacity.

Everyday Life

Pertains to daily activities, routines, behaviors, and interactions across various contexts and environments.