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:

Unit Variable Costs

Expenses that vary directly with the production volume, consisting of costs like materials and labor that change with the level of production.

Break-even Sales

The amount of revenue needed to cover both the fixed and variable costs, resulting in neither profit nor loss.

Unit Selling Price

The amount of money charged to a customer for a single unit of a product or service.

Unit Variable Costs

Costs that vary directly with the production volume, such as materials and labor, on a per-unit basis.