Question
So I am having some issues understanding concepts. I have questions with correct answers posted, if you could help explain why on any of them,
So I am having some issues understanding concepts. I have questions with correct answers posted, if you could help explain why on any of them, it would be greatly appreciated. Thank you in advance for helping me understand any of them!
1. Owners equity increases each period by the amount of the corporation's positive net cash flow.
False
2. If a company's cash balance increases during the year, and the company also reports positive net income, then the company's retained earnings balance must increase.
False
3. All of the following would result in an increase in stockholders equity EXCEPT
A. the company purchased treasury stock.
B. the company sold common stock at par value.
C. the company sold common stock above par value.
D. the company had positive net income greater than dividends paid.
4. When a company sells a piece of equipment or land, any gain (sales price less the book value of the asset or residual value) is thought to be a capital gain.
False
5. A company with negative net income will also have negative operating cash flow.
False
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started