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Bizhelp, Accountant
Category: Business and Finance Homework
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Experience:  BA degree and Certified Public Accountant
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Which of following actions is most likely to directly increase cash

Resolved Question:

Which of the following actions are most likely to directly increase cash as shown on a firm’s balance sheet? Explain
a) It issues $2 mllion of new common stock
b) It buys new plant and eguipment at a cost of $3 million
c) It reports a large loss for the year
d)It increases the dividends paid on its common stock.
Submitted: 7 years ago.
Category: Business and Finance Homework
Expert:  Bizhelp replied 7 years ago.

The answer is:

a) issue $2 million common stock.
The issuance of common stock will increase cash by selling stock.

Options B and D decrease cash.
Option C has no direct effect on cash.

Hope this helps, Best regards,

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