In Voluntary Exchange, If the Seller of a Product Gains

question 194

Multiple Choice

In voluntary exchange, if the seller of a product gains,

• A) the buyer will generally lose an amount greater than the gain to the seller.
• B) the buyer must lose an amount equal to what the seller gains.
• C) someone else must lose an equal amount.
• D) the buyer must also gain; mutual gain provides the foundation for exchange.

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Definitions:

Preferred Stock Dividends

Dividends that are paid out to holders of a company's preferred stock before any dividends are paid to common stockholders.

Common Stock Dividends Distributable

A liability account representing the amount of dividends declared by a corporation on common stock that have not yet been paid to stockholders.

Paid-in Capital

The total amount of money and other assets that shareholders have given a company in exchange for shares of stock.

Stockholders' Equity Section

The portion of the balance sheet that represents the ownership interest of shareholders in a company.