Which Statement Regarding Financial Statements Is True

question 24

Multiple Choice

Which statement regarding financial statements is true?

• A)Dividends paid reduce the net income that is reported on a company's income statement.
• B)If a company uses some of its bank deposits to buy short-term, highly liquid marketable securities, this will cause a decline in its current assets as shown on the balance sheet.
• C)If a company issues new long-term bonds during the current year, this will increase its reported current liabilities at the end of the year.
• D)If a company pays more in dividends than it generates in net income, its retained earnings as reported on the balance sheet will decline from the previous year's balance.

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Definitions:

Description of the Land

A detailed account or representation of a parcel of land's physical boundaries, size, and defining characteristics.

Source of Financing

The origin or means through which funds are provided for business activities, projects, or acquisitions.

Spring Beverage Company

Assuming it is a named entity, this would refer to a specific company involved in the production or distribution of beverages associated with the spring season or having 'Spring' in its name.

Enforceable

Capable of being imposed or upheld by law, referring to contracts, agreements, or rules that can be legally compelled.