Which One of the Following Will Increase Shareholders' Equity, All

question 206

Multiple Choice

Which one of the following will increase shareholders' equity, all else held constant?

• A) A purchase of equipment on account.
• B) The collection of an account s receivable.
• C) A sale of inventory at a profit.
• D) A payment on a loan.
• E) The declaration of a stock dividend.

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Definitions:

Chattel Paper

A document or electronic record indicating both a monetary obligation and a security interest in or a lease of specific goods.

Monetary Obligation

A required payment of money owed by one party to another, typically defined by the terms of a contract or agreement.

Security Interest

A legal claim or lien on collateral or property, given by the borrower to the lender, to secure repayment of a loan.

Purchase-Money Security Interest

A legal claim that allows a lender to repossess or foreclose on property financed through debt if the borrower defaults, specifically relating to the item purchased.