If a Company Reports a Net Loss It

question 16

Multiple Choice

If a company reports a net loss it

• A) may still have a net increase in cash.
• B) will not be able to pay cash dividends.
• C) will not be able to get a loan.
• D) will not be able to make capital expenditures.

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Definitions:

Statutes

Statutes are laws that have been enacted by a legislative body, such as a parliament or congress.

Leases

Legal agreements in which one party grants another the right to use a property, vehicle, or piece of equipment for a specified period in exchange for payment.

Duration

The measure of the length of time that an event lasts or a condition persists.

Statute of Frauds

A legal principle that requires certain types of contracts to be written and signed in order to be enforceable.