Which of the following describes the impact on the balance sheet when a company uses cash to purchase the stock of another company?

A) Total assets increase.
B) Stockholders' equity increases.
C) Stockholders' equity decreases.
D) Total assets remain the same.

Balance Sheet

A financial statement that presents the financial position of a company at a specific point in time, listing assets, liabilities, and equity.

Stockholders' Equity

The residual interest in the assets of a company after deducting its liabilities, representing ownership interest in a corporation.

Total Assets

The sum of all assets owned by an entity, including both current and non-current assets.