What Effect Does the Following Journal Entry Have on the Amount

question 123

Multiple Choice

What effect does the following journal entry have on the amount of cash generated by operating activities?

• A)Decreases it
• B)Increases it
• C)Has no effect
• D)Cannot be determined from the information given

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Definitions:

United States Treasury Securities

Debt securities issued by the U.S. government to fund its budget deficits and manage the national debt.

Open Market

A venue where buyers and sellers engage in the trade of commodities, securities, and other financial instruments under defined regulations.

Reserve Ratio

The fraction of deposits that banks are required to keep on hand as reserves, determined by central banking authorities.

Deposit Expansion Multiplier

The ratio that describes the potential increase in money supply through the banking system via fractional reserve banking.