A Statement of Retained Earnings Shows

question 56

Multiple Choice

A statement of retained earnings shows:

• A)The changes in the Cash account occurring during the accounting period.
• B)The revenue,expense,and dividends of the period.
• C)The types of assets that have been purchased with the earnings retained during the accounting period.
• D)The changes in the Retained Earnings account occurring during the accounting period.

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Definitions:

Salvage Value

The estimate of an asset's worth at the end of its useful life.

Average Accounting Return

A financial ratio that measures the net profit of a project or investment as a percentage of its initial cost.

Straight-line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal yearly amounts.

Net Income

The comprehensive earnings of a corporation after expenses and taxes have been taken away from its revenues.