With Respect to the Balance Sheet, an Increase in Equity

question 114

Multiple Choice

With respect to the balance sheet, an increase in equity of $2,000 with an increase in net income to $2,500, leads us to believe:

• A) the firm paid a dividend of $500.
• B) the firm plowed $500 back into the company.
• C) $500 went into retained earnings.
• D)debt increased by $2,000.

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Definitions:

Imports

Items or services acquired from overseas to be sold within a country.

Balanced Trade

A situation in which the value of a country's exports equals the value of its imports over a certain period.

Net Exports

The value of a country's exports minus its imports; a positive number indicates a trade surplus, while a negative one indicates a trade deficit.

Trade Surplus

A situation in which a country's exports exceed its imports.