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:

Screening

Screening is a process used by employers, lenders, and others to assess the qualifications, risks, or qualities of applicants before making a decision.

Life Insurance

A financial product that provides a payout to the beneficiaries upon the death of the insured.

Drug Test

A drug test is a technical analysis of a biological specimen that's used to detect the presence or absence of specified parent drugs or their metabolites.

Moral Hazard

Moral hazard occurs when there is a lack of incentive to guard against risk where one is protected from its consequences, often after entering into a contract or agreement.