Which of the following statements is incorrect? A. Dividend payments can be influenced by cash availability. B.Dividends shall not be paid out of assets to protect the creditors. C. Corporations must pay their investors dividends so they will not be charged penalty for improper accumulation. D. Additional funding may be sourced from retained earnings.

Which of the following statements is incorrect? A. Dividend payments can be influenced by cash availability. B.Dividends shall not be paid out of assets to protect the creditors. C. Corporations must pay their investors dividends so they will not be charged penalty for improper accumulation. D. Additional funding may be sourced from retained earnings.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 23MCQ

See similar textbooks

Similar questions

Which of the following statements is false? A. Noncash activities should be reported in accrual basis financial statements. B. Net cash flow from operating activities relates to normal business operations. C. Net income usually equals net cash flow from operating activities. D. The statement of cash flows is an essential part of the basic financial statements.
Answer the following questions for the directors: True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans?
See images below and answer these questions according to the financial information given Requirements 1. Answer the following questions for the directors: A. True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? B. True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? c. True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? D. True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities? E. True or false, buying property, plant and equipment would be considered a cash outflow from financing? F. True or false, the financing section of the statement of cash flows reflects transactions in the equity accounts and the long-term liability accounts? c. True or false, suppose Auga Company Ltd just started…
1. Which of the following will not be classified under operating activities in a cash flow statements?a. Cash receipts from sale of goods or rendering of services.b. Cash receipts from sale of equity and debt instruments of other entities held primarily for the purpose of being traded.c. Cash receipts from sale of equity instruments representing interests in joint ventures.d. Cash payments to employees for short-term employee benefits. 2. Which of the following is a correct computation of cash flows from operation using the indirect method? a. Profit less depreciation expense, add increase in accounts receivable, less increase in accounts payable. b. Profit less depreciation expense, add decrease in accounts receivable, deduct increase in accounts payable. c. Profit add depreciation expense, add decrease in accounts receivable, deduct increase in accounts payable. d. Profit add depreciation expense, add decrease in accounts receivable, less decrease in…
Answer the following questions for the directors: True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities? True or false, buying property, plant and equipment would be considered a cash outflow from financing? True or false, the financing section of the statement of cash flows reflects transactions in the equity accounts and the long-term liability accounts? True or false, suppose Auga Company Ltd just started business and was looking for additional capital in order to purchase a property to build their headquarters. If they found an…
Answer the following questions for the directors: True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities? True or false, buying property, plant and equipment would be considered a cash outflow from financing? True or false, the financing section of the statement of cash flows reflects transactions in the equity accounts and the long-term liability accounts? True or false, suppose Auga Company Ltd just started business and was looking for additional capital in order to purchase a property to build their headquarters. If they found an…
Which of the following statements is FALSE?i. Using the payback rule, you can calculate how much profits are earned over the investment period.ii. The IRR is sensitive to the timing of the cash flows.iii. Shareholders have the first claim on the cash flows of the company.
True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans?
No handwriting. Kindly show all working so when I work it out on my own, I would know how we both arrived at the answers we did if any of the answer differ. Requirements 1. Answer the following questions for the directors: A. True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? B. True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? C. True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? D. True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities? E. True or false, buying property, plant and equipment would be considered a cash outflow from financing? F. True or false, the financing section of the statement of cash flows reflects transactions in the equity accounts and the long-term liability…
Substantial doubt exists regarding a client's ability to continue. The client must present its plans to mitigate the effects of the events and conditions. Which item is NOT an acceptable plan? a. Restructure debt to delay due date of Bonds Payable. b. Sell assets used in product production for cash. c. Issue Common Stock at market value. d. Decrease dividend requirements. e. Obtain cash by issuing notes.
Is it impossible for a company to report positive net income on the income statement but have negative cash flows from operating activities on the statement of cash flows? Yes or No? Thanks :)
Which of the following statements is false? (You may select more than one answer.)a. Purchasing a new manufacturing plant is classified as an investing activity.b. Paying off accounts payable balances is classified as a financing activity.c. Dividend payments are classified as a financing activity.d. Either the direct or the indirect method can be used to calculate the net cash provided by financing activities.