Asked by Annie Leishman on Jun 14, 2024
Verified
If a company reports a loss, it
A) may still have a net increase in cash.
B) will not be able to pay cash dividends.
C) will not be able to get a loan.
D) will not be able to make capital expenditures.
Net Increase
refers to the change in a financial statement item that results in a higher amount compared to a previous period.
Cash Dividends
Payments made by a company out of its profits to its shareholders, typically in cash.
Capital Expenditures
Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.
- Investigate the outcomes of distinct transactions on the statement of cash flows.
Verified Answer
RW
Ruthie WolfeJun 17, 2024
Final Answer :
A
Explanation :
A company can report a loss for the period but still experience a net increase in cash. This can occur through activities such as issuing new shares, taking on new debt, or selling assets, which can provide cash inflow despite the loss from operations.
Learning Objectives
- Investigate the outcomes of distinct transactions on the statement of cash flows.
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