How Would a New Issue of Common Stock Be Shown

question 55

Multiple Choice

How would a new issue of common stock be shown on the statement of cash flows?

• A) Negative cash flow in the investing section
• B) Positive cash flow in the investing section
• C) Negative cash flow in the financing section
• D) Positive cash flow in the financing section

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Definitions:

Liquidity

The ease with which an asset, or security, can be converted into ready cash without affecting its market price.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.

Financial Ratios

Metrics derived from financial statements that are used to evaluate a company's performance and financial health.

Total Sales

The aggregate revenue a company generates from the sale of goods or services before any deductions are made.