Which of the following would not affect a company's net income?

Question

Quizplus · Accepted Answer

Net income equals the difference between revenues and expenses.Dividends are not expenses.Rather,dividends are an optional distribution of earnings to stockholders and,as such,they are reported on the statement of retained earnings.Income tax expense is reported on the income statement;a change in the company's income taxes would affect net income.Sales of a company's product are revenue on the income statement;and a change in the selling price would affect net income.Advertising expense is reported on the income statement;the expense incurred to advertise a new product would affect net income.Since dividends are not reported on the income statement,paying a dividend to stockholders would not affect net income.

Which of the Following Would Not Affect a Company's Net