The 2010 Sale of Half of the Treasury Stock Would

question 47

Multiple Choice

The 2010 sale of half of the treasury stock would:

• A)Reduce income before tax by $60,000.
• B)Reduce retained earnings by $60,000.
• C)Increase total shareholders' equity by $300,000.
• D)Decrease retained earnings by $40,000.

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Definitions:

Halo effect

A cognitive bias where the impression of a person, brand, or product in one area positively influences one's opinion or feelings in another area.

Consistency Principle

The psychological tendency for individuals to seek harmony and consistency among their beliefs, attitudes, and behaviors.

Sleeper Effect

A delayed increase in the persuasive impact of a message, where the message becomes more effective over time after the initial exposure.

Buzz

The word-of-mouth communication that customers generate about a product, service, or company, often seen as a powerful marketing tool.