b. False
a. Payment of dividends and common stock.
b. Net income and common stock.
c. Net income and payment of dividends.
d. Net income and paid-in capital.
Answer:
c. Net income and payment of dividends.
Explanation:
The statement of stockholder's equity comprises common stock and retained earnings. The ending balance after adjustment shown in the attached spreadsheet.
The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
And, the ending balance of the common stock = Beginning balance of common stock + issued shares
Hence, the appropriate option is c.
Retained earnings are affected by the net income and the payment of dividends. Net income can increase retained earnings, while payment of dividends decreases retained earnings.
The change in retained earnings is affected by both net income and the payment of dividends. Option c is the correct choice. Retained earnings refer to the net income that a company keeps after it has paid dividends to its investors. When a company generates net income, it has a choice: it can either distribute these earnings to the shareholders in the form of dividendsor retain them within the company. The money that is kept or 'retained' in the business then becomes part of the 'retained earnings'. Conversely, when a company pays dividends, it decreases its retained earnings.
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Answer:
Closing cost
Explanation:
Answer:
: The correct answer is the letter c. “More than the economically efficient output level”.
Explanation:
An externality happens when activities of one economic agent affect the activities of another economic agent, in a way that is not reflected in prices. When there is externality, the price of a good does not reflect its social value, that is, companies can produce excessive or insufficient quantities, making the market inefficient. Negative externality concerns, for example, when a company has a higher production generating externality in the production of another company, that is, negatively affecting the production of this company. Thus, the output of the company that generated negative externality is higher than it should be. One solution to this problem is to tax the company that generates externality.
A negative externality leads to the private market producing more than the economically efficient output level.
When a negative externality exists, the private market produces more than the economically efficient output level. This is because negative externalities, such as pollution, lead to social costs that are not considered by the private market. As a result, production levels exceed the socially optimal level, leading to inefficiency in resource allocation.
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