Question

Which of the following statements is incorrect?

a) All the answers are correct except one.
b) Change in Retained Earnings = Forecasted Net Income - Forecasted Dividends where the dividends are those paid to both the common and. preferred stockholders:
c) The difference between total assets and total liabilities and owner's equity is referred to as discretionary financing needed (DFN, also called additiona! funds needed or required new funds).
d) Depreciation expense depends on the amount and age of the firm's fixed assets, and therefore the changes in depreciation are not directly related to a change in sales in the short term.
e) Common stock is a spontaneous sources of financing.

Answer 1

The incorrect statement is option e) Common stock is a spontaneous source of financing.

Step-by-step explanation:

The incorrect statement is option e) Common stock is a spontaneous source of financing.

Common stock is not a spontaneous source of financing. It is one of the sources of financial capital, along with early-stage investors, reinvested profits, and borrowing through banks or bonds. Common stock represents ownership in a company and is typically acquired by investors through the purchase of shares in the company.