Which of the Following Will Not Cause a Change in the Stockholders

question 254

Multiple Choice

Which of the following will not cause a change in the stockholders' equity of a business?

• A) An increase in prepaid expenses.
• B) An increase in retained earnings.
• C) The sale of common stock.
• D) The declaration and payment of dividends.

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Definitions:

Direct Materials Quantity Variance

Direct materials quantity variance is a measure of the difference between the estimated amount of materials supposed to be used in production and the actual amount used, reflecting efficiency in material usage.

Material Costing

The process of determining the costs associated with the raw materials used in the production of goods or services.

Pounds of Material

A measure of the quantity of material, often used in manufacturing, expressed in pounds.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain amount of goods, multiplied by the standard labor rate.