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Unformatted text preview: D) Depreciation expenses. E) Cost of goods sold. Points Earned: 5.0/5.0 Correct Answer(s): A 4. Which of the following statements is CORRECT? A) Since depreciation is a source of funds, the more depreciation a company has, the larger its retained earning will be, other things held constant. B) If a firm reports a loss on its 2005 income statement, then the retained earnings account as shown on the balance sheet will be negative. C) The retained earnings account as shown on the balance sheet is a source of cash that can be used to pay dividends. D) A firm can show a large amount of retained earnings on its balance sheet yet need to borrow cash to make required payments. E) Common equity includes common stock and retained earnings, less accumulated depreciation. Points Earned: 5.0/5.0 Correct Answer(s): D...
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