When the firm cuts its dividend ratio, the earnings retention ratio will increase.
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Explanation:
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The retention ratio is the extent of profit held back in the business as held income. It is something contrary to the payout proportion, which gauges the level of benefit delivered out to investors as profits.
The maintenance proportion is additionally called the plowback proportion. Held benefit is the benefit stayed within the instead of paid out to investors as a profit. Held benefit is broadly viewed as the most significant long haul wellspring of fund for a business
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Answer:
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Answer:
The correct options are<em> (B). Provide information about dissatisfied customers and the possibility of lost future sales and (D). Are usually recorded in separate contra-revenue accounts.</em>
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<em>From the foregoing the Account Receivable should be credited with the full amount of the original sales transactions not debited as provided in option </em><em>"A." Represent a reduction of the customer's account receivable.</em>
Explanation:
<em>Sales Returns and Allowances is a contra-revenue account deducted from Sales</em>. When customers return goods for one unsatisfied reason or the other, adjustments are made to the sales account. Likewise, deductions to the original selling price are made when the customer accepts defective products.
<em>How to Record the Sales Return Transaction
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<em>The following under-listed steps are to be taken to make the appropriate entries:</em>
- Debit sales returns and allowances by the selling price.
- Debit the appropriate tax liability account by the taxes collected on the original sale.
- Credit cash or accounts receivable by the full amount of the original sales transaction.
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