Investors Are Often Interested in the Amount of Net Income

question 105

Multiple Choice

Investors are often interested in the amount of net income distributed as dividends.In which section of the financial statements would investors look to find this amount?

• A)Statement of retained earnings.
• B)Balance sheet.
• C)Notes to the financial statements.
• D)Income statement.

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Definitions:

Medicare Tax

A federal tax that helps fund the Medicare program, which provides health insurance for individuals who are 65 years old and older or who meet other specific criteria.

Salaries Payable

An account on the balance sheet that represents the amount of unpaid wages owed to employees at the end of a reporting period.

Payroll Register

A payroll register is a detailed document that records all employees' payroll activities, including wages, salaries, deductions, and net pay for a specific period.

Net Pay

The amount of an employee's earnings remaining after deductions, such as taxes and social security contributions, have been made.