Which of the Following Transactions Would NOT Result in a Decrease

question 70

Multiple Choice

Which of the following transactions would NOT result in a decrease to retained earnings?

• A) declaration and issuance of a stock dividend
• B) incurrence of a net loss for the period
• C) reacquisition of shares for less than the original issue price
• D) correction of an error in which depreciation expense was understated in a prior period

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Definitions:

Artificially Scarce Good

A product or service whose availability is limited due to artificial constraints, such as legal restrictions or monopolistic practices, rather than natural scarcities.

Competitive Market

A market structure where many firms offer products or services that are similar, allowing consumers to find substitutes easily.

Efficient Price

A market price that reflects all available information and results in an allocation of resources that maximizes overall utility.

Marginal Cost

The incurred cost from generating one more unit of a product or service.