Which of the following statements is true?
A)Profits distributed to the creditors are called dividends.
B)The balance sheet shows the assets,liabilities,and profits of a company.
C)Dividends are an expense and are reported on the income statement as a deduction from net income.
D)The income statement reports the revenues and expenses of a company.

Question

Quizplus · Accepted Answer

The income statement reports the revenues and expenses of a company. Option A is incorrect as profits distributed to creditors are called interest payments or debt repayments. Option B is incorrect as the balance sheet shows the assets, liabilities, and equity of a company. Option C is incorrect as dividends are not an expense, but rather a distribution of profits to shareholders.

Which of the Following Statements Is True