The Payment of an Amount Owed to a Creditor Would

question 78

Multiple Choice

The payment of an amount owed to a creditor would:

• A)decrease liabilities.
• B)decrease assets.
• C)increase net income.
• D)both decrease assets and decrease liabilities.

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Definitions:

Equity-Financed

A method of funding a company's operations by issuing shares to investors, rather than taking on debt.

Incremental Value

The additional value generated by undertaking a specific action or investment compared to not doing so.

Shares Outstanding

The total number of shares of a company's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares.

Equity-Financed

A method of funding a company’s operations by issuing shares of stock to investors rather than borrowing money.