All of the Following Are Primary Events That Typically Lead

question 11

Multiple Choice

All of the following are primary events that typically lead to changes in book value of shareholders' equity except :

• A) Investments by shareholders, usually net cash received by the company at equity issue date.
• B) Profitable operating and investing activities, with net income being a large component of this increase.
• C) Debtholders requiring firms to enter into debt covenants.
• D) Distributions to shareholders, usually in the form of periodic cash dividend payments to investors and sometimes in the form of share repurchases.

---

Definitions:

Rent Expense

An expense account that records the cost incurred by a business to utilize property or equipment for operations.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account, reflected on the left side of an account.

Credit

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is also used to refer to the provision of resources by a credit provider to a borrower.

Expenses

Costs incurred in the process of earning revenues, generally categorized as operating or non-operating.