What Will Happen to Retained Earnings When a Corporation Issues

question 116

Multiple Choice

What will happen to retained earnings when a corporation issues 1,000 shares of $1 par stock for $10 per share?

• A)it will increase by $1,000.
• B)it will increase by $9,000.
• C)it will decrease by $9,000.
• D)it will remain unchanged.

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Definitions:

Innocent Misrepresentation

A false statement made without knowledge of its falsity, not intended to deceive, which can lead to a contract being voided if relied upon by the other party.

Rescission

The legal remedy of canceling, terminating, or annulling a contract and restoring the parties to their original positions as if the contract had never been made.

Compensatory Damages

Financial compensation awarded to a plaintiff to cover losses or injuries that have been directly caused by the actions of the defendant.

Negligent Misrepresentation

A false statement made carelessly that causes someone to suffer damages because they relied on it being true.