Relationships on the Financial Statements That Do Not Make Sense

question 37

True/False

Relationships on the financial statements that do not make sense may indicate problem areas in the accounts.

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Definitions:

Investments Contributed

The act of providing capital in the form of investment assets to a company or project without immediate expectation of returns.

Net Income

The total profit of a company after all revenues and gains are accounted for and all expenses and losses are deducted.

Dividend Amount

The sum of money paid regularly by a company to its shareholders out of its profits (or reserves).

Preferred Stock

A type of stock that provides dividends before any dividends are provided to common stockholders, often with fixed rates.