An Increase in Total Assets Can Be Financed by an Increase

question 89

Multiple Choice

An increase in total assets can be financed by an increase in which of the following capital components:

• A) debt
• B) preferred stock
• C) common equity
• D) All of the above

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Definitions:

Equipment

Long-term assets that are used in the production of goods and services; these are tangible in nature.

Accounts Receivable

Obligations of customers to pay a company for goods or services that have been dispensed but remain unpaid.

Journalize

The process of recording transactions in a company's journal, marking the first step in the accounting cycle.

Transactions

Economic events that involve transferring resources between entities, affecting financial statements.