Which of the Following Transactions Will Increase Stockholders' Equity

question 39

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 company purchases equipment.
• D)The company makes a payment on account.

Recognize different categories of expenses and their treatment in financial accounting.

Differentiate between various types of financial statements and understand their purposes.

Comprehend the significance of accounting cycles and their impact on financial reporting.

Know the basic accounting principles and assumptions guiding financial reporting.

---

Definitions:

Recognize Income

The process of reporting income on the tax return in the year it is received or accrued, according to IRS rules.

Tax Purposes

This encompasses reasons or considerations related to the assessment, computation, and payment of taxes.

Employer-Paid Premiums

Premiums paid by employers for employee benefits like health insurance, usually not taxable income for the employee.

Life Insurance

Life Insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person.