Which One of the Following Will Decrease the Value of the Owners

question 25

Multiple Choice

Which one of the following will decrease the value of the owners' equity on a statement of financial position?

• A) Dividends paid during the year in an amount which exceeds the net income for the year.
• B) The sale of new shares of stock.
• C) The purchase of new equipment using the proceeds of a bank loan.
• D) The sale of inventory at a profit.
• E) A decrease in the amount of long-term debt owed by a firm.

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Definitions:

Legitimate Authority

The right to lead or command, based on a recognized and accepted position of power within social, legal, or organizational structures.

Scientific Management

A management theory that emphasizes optimizing efficiency through systematic study and analysis of work processes.

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Assistance and guidance provided by supervisors to their subordinates to help them perform their duties.

Job Science

An interdisciplinary field that applies scientific methods and principles to the study of employment, workforce dynamics, and labor markets.