Which One of the Following Events Increases the Debt/equity Ratio

question 60

Multiple Choice

Which one of the following events increases the debt/equity ratio?

• A)Purchase of inventory on account
• B)Sale of treasury stock for less than its cost
• C)The payment of cash dividends that were previously recorded
• D)Recognition of net income for the year

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Definitions:

Government

The governing body of a nation, state, or community, which plays a crucial role in regulating economic policies, taxation, and public spending.

Funds

Financial resources or capital invested in various assets or projects with the expectation of generating returns.

Interest

The cost of borrowing money or the payment received for depositing money, usually expressed as a percentage over a period of time.

Annual Payments

Payments made once a year, often in the context of loan repayments or investment incomes.