Which of the Following Transactions Would NOT Result in an Increase

question 45

Multiple Choice

Which of the following transactions would NOT result in an increase to retained earnings?

• A)correction of an error in which expenses were overstated in a previous year
• B)issuance of a 3-for-1 stock split
• C)reacquisition of shares for less than the original issue price
• D)earning of net income for the period

---

Definitions:

Journal Entry

A recording of a transaction or adjustment in the accounting ledger that includes the accounts and amounts to be debited and credited.

Bonds Payable

Long-term debt securities issued by corporations or governments, promising to pay the holder a specified amount of interest and to repay the principal at maturity.

Contract Interest Rate

The interest rate specified within a financial contract, such as a loan or bond agreement, that determines the interest payments.

Paid-In Capital

Capital contributed to a corporation by the stockholders and others.