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:

Cations

Positively charged ions that are formed when an atom loses one or more electrons.

Positive Charge

A type of electrical charge, typically carried by protons, that repels other positive charges and attracts negative charges.

Ionic Compounds

Compounds composed of ions held together by ionic bonds; typically formed when a metal reacts with a nonmetal or a polyatomic ion.

CH4

CH4, methane, is a simple alkane hydrocarbon with one carbon atom bonded to four hydrogen atoms, and is a major component of natural gas.