Drawbacks of Selling Stock as a Source of Funds Include

question 86

Multiple Choice

Drawbacks of selling stock as a source of funds include

• A) enhanced corporate image.
• B) loss of voting control of the company.
• C) future financing.
• D) estate planning.

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Definitions:

Cash-Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Prepaid Insurance

An asset on the balance sheet that represents insurance paid in advance, which will be expensed over the time period it covers.

Rent Expense

The cost incurred from leasing a property or equipment for business operations, recognized as an expense over the lease period.