Question

Which one of the following would least likely result in a negative effect on of stockholders' equity?

Answer 1

Shareholders' equity, which is listed on a company's balance sheet, is used by investors to determine the financial health of a company. Shareholders' equityrepresents the amount that would be returned to shareholders if all a company's assets were liquidated and all its debts repaid. In this article, we'll review how shareholders' equity measures a company's net worth and some reasons behind negative shareholders' equity.

Least likely result

Amortization of Intangible Assets

The amortization of intangible assets,such as patents or trademarks, is recorded in the shareholders' equity section of the balance sheet and might exceed the existing balance of stockholders' equity. The amortization of intangibles is the process of expensing the cost of an intangible asset over the projected life of the asset.