Which One of the Following Transactions Always Causes a Decrease

question 41

Multiple Choice

Which one of the following transactions always causes a decrease to retained earnings?

• A)Selling treasury stock
• B)Incurring net income for the period
• C)Declaring a stock dividend
• D)Paying a cash dividend that was previously declared

---

Definitions:

Average Total Cost

The per-unit cost of production, calculated by dividing the total cost of production by the quantity of output produced.

Economic Profit

The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.

Short-run Marginal Cost Curve

A curve that shows the change in total cost associated with producing one more unit of output in the short term.

Diminishing Marginal Returns

A principle that states as additional units of a variable input are added to fixed inputs, the additional output produced from each new unit eventually decreases.