When a Trial Balance Is in Balance

question 39

Multiple Choice

When a trial balance is in balance,

• A) adjusting entries are not required.
• B) the general ledger is free of errors.
• C) the debit account balances equal the credit account balances.
• D) the company has earned a net income.

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Definitions:

Dividend Payout Ratio

The dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends, expressed as a percentage, showing the percentage of earnings distributed as dividends.

Market Price

This represents the price at which a commodity, security, or other financial instrument is traded on the open market and can be purchased or sold.

Common Stock

Signifies holding stakes in a corporation, which provides owners with the right to vote and a portion of the company's earnings via dividends.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.