Which of the Following Is an Example of the Use

question 38

Multiple Choice

Which of the following is an example of the use of accounting information?

• A) A business owner using information gathered from the business' accounting system to plan, control and make decisions.
• B) A shareholder accessing a company's annual report to help with their investing decisions.
• C) A bank requiring reports generated from the business' accounting system to make a lending decision.
• D) All of these are examples of the use of accounting information.

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Definitions:

Retained Earnings

The part of net earnings kept by the company instead of being paid out to its shareholders in the form of dividends.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares, rather than cash, based on the proportion of shares already held.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders the right to vote on corporate matters and receive dividends.

Dividend Payable

A liability reported on a company's balance sheet for dividends declared by the board of directors but not yet paid out to shareholders.