Which of the Following Statements Is True

question 61

Multiple Choice

Which of the following statements is true?

• A) Debits increase assets and increase liabilities.
• B) Credits decrease assets and increase liabilities.
• C) Credits decrease assets and decrease liabilities.
• D) Debits increase liabilities and decrease assets.

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Definitions:

Payout Ratio

The percentage of earnings paid to stockholders in dividends.

Tax Implications

The effects that various financial decisions and actions have on the amount of tax an individual or business owes to the government.

Proportionate Ownership

The share of ownership in a company or property based on the percentage of shares or units held relative to the total outstanding.

Shareholder's Wealth

The value of a company to its shareholders, often measured by the price of its shares multiplied by the number of shares outstanding.