Which One of the Following Events Increases the Debt/equity Ratio

question 60

Multiple Choice

Which one of the following events increases the debt/equity ratio?

• A)Purchase of inventory on account
• B)Sale of treasury stock for less than its cost
• C)The payment of cash dividends that were previously recorded
• D)Recognition of net income for the year

---

Definitions:

Experimental Controls

The use of techniques in scientific experiments to minimize the effects of variables other than the independent variable, ensuring the results are due to the variable being tested.

Information-Processing Model

A cognitive approach that uses the analogy of a computer to explain how human mind manages information.

Psychodynamic

Relating to a psychological approach that emphasizes systematic study of the psychological forces that underlie human behavior, feelings, and emotions and how they might relate to early experience.

Heuristic Model

A mental shortcut or rule-of-thumb that simplifies decision making, not guaranteed to be perfect, but useful for practical problem-solving.