At the End of the Year,a Company Issued Stock for Cash

question 93

Multiple Choice

At the end of the year,a company issued stock for cash and then used the cash to acquire a piece of land for future development.Which of the following is true?

• A)Net profit margin ratio will decrease and debt-to assets ratio will decrease.
• B)Net profit margin ratio will not change and debt-to-assets ratio will increase.
• C)Net profit margin ratio will increase and debt-to-assets ratio will decrease.
• D)Net profit margin ratio will not change and debt-to-assets ratio will decrease.

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Definitions:

Enforceability

The ability of a legal document or agreement to be upheld or compelled by law in a court of justice.

Notice of Assignment

A formal notification given to all relevant parties that a specific task, role, or obligation has been assigned to another party.

Assignee

An individual, group, or legal entity to which rights or interests have been transferred by another, known as the assignor.

Assigned Rights

Assigned rights involve the transfer of rights or duties under a contract from one party to another, not transferring the entire contract but specific benefits.