Which of the Following Balance-Sheet Accounts Will Not Be Affected

question 98

Multiple Choice

Which of the following balance-sheet accounts will not be affected when there is a reduction in the number of outstanding shares?

• A)retained earnings
• B)additional paid-in capital
• C)common shares (at par value)
• D)treasury stock at cost

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Definitions:

Unit Selling Price

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

Unit Variable Cost

The variable cost associated with the production of one unit of a product or service.

Total Fixed Costs

These are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Average Operating Assets

The average value of assets used in the production process or in generating sales, calculated over a specific period.