Revenues Are Increased With

question 113

Multiple Choice

Revenues are increased with:

• A)debits because they decrease stockholder's equity.
• B)credits because they decrease stockholder's equity.
• C)credits because they increase stockholder's equity.
• D)debits because they increase stockholder's equity.

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Definitions:

Balance Sheet

An accounting report that outlines a firm's assets, obligations, and owners' equity on a specific date.

Leverage Ratio

A financial metric indicating the level of debt relative to equity in a company's capital structure, used to assess the risk of investing in the company.

Acid-test Ratio

A financial metric used to evaluate a company's short-term liquidity, calculated by dividing liquid assets by current liabilities.

Financing Activities

Financial transactions that involve raising capital and repaying investors, such as issuing equity, securing loans, or paying dividends, which impact a company's cash flow.