XYZ Company Had a Net Income of $40 Million in 2018

question 153

Multiple Choice

XYZ Company had a net income of $40 million in 2018. The firm paid no dividends. If there were no further changes to the stockholders' equity accounts, then ____________ by $40 million.

• A) Total debt must have increased.
• B) Retained earnings must have increased
• C) Total shareholders' equity must have decreased
• D) Common stock must have decreased
• E) The market value of the firm's stock must have decreased

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Definitions:

Obedience to Authority

The psychological tendency of individuals to comply with the directives or orders from an authority figure, even if they may conflict with personal values.

Transactional Leadership

A leadership style that focuses on the exchanges that occur between leaders and their followers, where followers are rewarded for specific actions or achievements.

Immediate Job

A position of employment that is available and starts without any delay.

Significant Other Group

A social group considered important to an individual's life and decisions, often influencing their beliefs, values, and behavior.