An Increase in Total Assets

question 39

Multiple Choice

An increase in total assets:

• A)means that net working capital is also increasing.
• B)requires an investment in fixed assets.
• C)means that shareholders' equity must also increase.
• D)must be offset by an equal increase in liabilities and shareholders' equity.
• E)can only occur when a firm has positive net income.

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Definitions:

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry and the nation's stock and options exchanges.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically including balance sheets, income statements, and cash flow statements.

Constructive Fraud

Deception or misrepresentation made without the intent to deceive, usually due to neglect or failure to fulfill a duty, which causes harm to another party.

Grossly Negligent

A severe lack of care or the extreme departure from the care a reasonable person would exercise in a similar situation, often resulting in harm or damage.