Which of the Following Statements Is True

question 17

Multiple Choice

Which of the following statements is true?

• A)Accumulated depreciation is a contra account in the income statement.
• B)The current ratio is current assets divided by current liabilities.
• C)Retained earnings is the accumulated profit plus the accumulated dividends paid.
• D)Book value of a building is the cost less the current year's depreciation.

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Definitions:

Return on Total Assets

A profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.

Ratio

A relationship of two quantities or numbers, one divided by the other.

Trend Percentage

A financial analysis tool that shows how a set of financial or quantitative data changes over time, often expressed as a percentage.

Common-size Statement

A financial statement that presents all line items as a percentage of a common base figure, facilitating comparison across time and entities.