All of the Following Would Result in an Increase in Stockholders

question 78

Multiple Choice

All of the following would result in an increase in stockholders equity except:

• A) the company sold common stock at par value.
• B) the company sold common stock above par value.
• C) the company purchased treasury stock.
• D) the company had positive net income greater than dividends paid.

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Definitions:

Operating Cycle

The time period between the purchase of inventory and the collection of accounts receivable from the sale of that inventory.

Current Asset Accounts

Balance sheet accounts that represent resources with value owned by a company, expected to be converted into cash or used within a year.

Cleanup Loan

A short-term loan used to clear outstanding debts, often as a way to improve financial metrics before seeking longer-term financing.

Bankers' Acceptance

A short-term debt instrument issued by a company but guaranteed by a bank, commonly used in international trade to facilitate transactions.