Which of the following statements is true?

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities, making option B true. Option A is false as accumulated depreciation is a contra account on the balance sheet, not the income statement. Option C is partially true, as retained earnings include accumulated profits but not dividends paid. Option D is also partially true, as book value is the cost of the asset less its accumulated depreciation, which includes all prior years' depreciation, not just the current year.

Which of the Following Statements Is True