Most states limit dividend policy by requiring that dividends ____.   a. not be paid unless the firm generates net earnings during the most recent year   b. not be paid when the firm is insolvent   c. be paid out of the firm’s capital   d. be paid only out of retained earnings

24) When attempting to raise cash, a company may find it more advantageous to issue bonds rather than common stock shares because of the tax advantage. TRUE FALSE

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Stock dividends and stock splits are similar in that both do not change total stockholders’ equity. (True/False) A company must accrue a liability for sick pay that accumulates but does not vest. (True/False) A company may exclude a short-term obligation from current liabilities if the firm can demonstrate an ability to complete a refinancing. (True/False) Federal income taxes should be included in an employer’s payroll tax expense. (True/False) Whether an employee earns $80,000 a year or $800,000 a year, all of the earnings will be subject to Medicare deductions. (True/False)   To record compensated absences as a liability GAAP establishes four criteria. The employer needs to meet any two of these four criteria in order to recognize a liability for compensated absences. (True/False)   Stock dividends and stock splits both cause the number of shares outstanding to increase and retained earnings to decrease. (True/False)