Which of the Following Transactions Will Increase Stockholders' Equity

question 54

Multiple Choice

Which of the following transactions will increase Stockholders' Equity?

• A) The company pays a dividend to its shareholders.
• B) The company issues common stock to new shareholders.
• C) The president of the company buys a new personal automobile.
• D) The company makes a payment on account.

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Definitions:

Administrative Expenses

The costs related to the general administration of a business, such as salaries of senior executives, accounting, human resources, and information technology.

President's Salaries

Compensation or wage paid to the president of a company, often reflecting their role's responsibility and level of professional experience.

Depreciation

The planned allocation of a physical asset's cost over the time it remains useful.

Merchandising Business

A type of business that purchases finished goods and sells them to consumers, typically at a retail level.