All Else Held Constant,the Book Value of Owners’ Equity Will

question 9

Multiple Choice

All else held constant,the book value of owners’ equity will decrease when:

• A)the market value of inventory increases.
• B)dividends exceed net income for a period.
• C)cash is used to pay an accounts payable.
• D)a long-term debt is repaid.
• E)taxable income increases.

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Definitions:

Marginal Utility

The additional satisfaction or utility received by consuming one more unit of a good or service.

Soft Drinks

Non-alcoholic beverages that are usually carbonated and contain various flavorings and sweeteners.

Chips

Thin slices of potatoes, vegetables, or other foods, fried or baked until crispy, commonly served as a snack or side dish.

Equal Marginal Principle

The principle stating that optimal allocation occurs when the marginal benefits from allocation of resources to different uses are equalized.