Open Charge Accounts Can Hinder the Cash Flow of a Business

question 109

True/False

Open charge accounts can hinder the cash flow of a business and eventually cause the business to fail.

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Definitions:

Dividends

Dividends are payments made by a corporation to its shareholder members, usually extracted from the company's earnings.

Selling Stock

The process of offering shares of a company's capital to investors in exchange for capital, diluting ownership but potentially raising funds for growth.

S-type Corporation

A special designation that allows corporations to pass corporate income, credits, and deductions directly to their shareholders for federal tax purposes.

Taxation

The practice by which a government collects money from individuals, businesses, and other organizations to fund public services and initiatives.