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:

Rate of Return

Rate of return refers to the profit or loss achieved from an investment during a specific time frame, represented as a percentage of the investment's original price.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.

Principle

The original amount of money invested or loaned, before interest is added.

Graduate

A person who has successfully completed a course of study or training, especially one provided by a college or university.