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Which one of these is correct? Multiple Choice Depreciation has no effect on taxes. Interest paid...

Which one of these is correct?

Multiple Choice

Depreciation has no effect on taxes.

Interest paid is a noncash item.

Taxable income must be a positive value.

Net income is distributed either to dividends or retained earnings.

Taxable income equals net income divided by (1 + Average tax rate).

Solutions

Expert Solution

Correct option : Net income is distributed either to dividend or retained earnings.

Explanation: after having net income , the company can either pay dividend to its shareholders or retain that income as reserves.

jeff jeffy answered 2 years ago
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