Return on Equity Is Calculated By

question 78

Multiple Choice

Return on equity is calculated by:

• A)Dividing net income by total revenue.
• B)Dividing net income by average stockholders' equity.
• C)Dividing net income by working capital.
• D)Dividing dividends by stockholders' equity.

Grasp the equity method adjustments for intra-entity inventory sales and unrecognized profits.

Comprehend the transition and accounting implications from fair-value method to equity method of accounting.

Acquire knowledge on the treatment of permanent loss in value of investments under the equity method.

Gain insights into how dividends and net income of investees affect the investor's financial statements under the equity method.

---

Definitions:

Adrenal Glands

Endocrine glands located above the kidneys that produce various hormones including adrenaline and cortisol, which help control stress responses.

Menopause

The time of natural cessation of menstruation; also refers to the biological changes a woman experiences as her ability to reproduce declines.

Sex-reassignment Surgery

A medical procedure or series of procedures by which a person's physical sex characteristics are altered to resemble that of their gender identity.

Transgender

An umbrella term for individuals whose gender identity or expression differs from the sex assigned to them at birth.