Which of the Following Transactions Will Not Result in an Increase

question 195

Multiple Choice

Which of the following transactions will not result in an increase in revenues?

• A) Sale of goods on credit
• B) Sale of services for cash
• C) Accumulation of interest in bank account
• D) Sale of stock to investors for cash

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Definitions:

Common Stock Account

An equity account that represents the ownership interest held by common shareholders in a corporation, including its value and dividends.

Capital in Excess of Par

The amount by which the proceeds from the issuance of shares exceed the par value of the shares issued; it's often referred to as additional paid-in capital.

Debt-Equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.

Residual Dividend Policy

A strategy where dividends paid to shareholders are set based on the earnings left over after all operational costs and working capital needs are met.