Which one of these is correct?
A)Depreciation has no effect on taxes.
B)Interest paid is a noncash item.
C)Taxable income must be a positive value.
D)Net income is distributed either to dividends or retained earnings.
E)Taxable income equals net income × (1 + Average tax rate).

Question

Which one of these is correct?
A)Depreciation has no effect on taxes.
B)Interest paid is a noncash item.
C)Taxable income must be a positive value.
D)Net income is distributed either to dividends or retained earnings.
E)Taxable income equals net income &times; (1 + Average tax rate).

Quizplus · Accepted Answer

Net income is distributed either to dividends or retained earnings, as it represents the profit after all expenses and taxes have been deducted.

Which One of These Is Correct