Which of the following transactions increases liabilities and decreases stockholders' equity?
A) Declaration and payment of a dividend
B) Advance payment made for insurance
C) Receipt of a phone bill to be paid at a later time
D) Payment of a liability

Question

Quizplus · Accepted Answer

Receipt of a phone bill to be paid at a later time increases liabilities (accounts payable) and decreases stockholders' equity (retained earnings).

Which of the Following Transactions Increases Liabilities and Decreases Stockholders