How Does an Investment of Cash in a Corporation Affect

question 78

Multiple Choice

How does an investment of cash in a corporation affect the corporation's balance sheet?

• A)It increases assets and decreases stockholders' equity.
• B)It increases assets and increases stockholders' equity.
• C)It increases assets and increases liabilities.
• D)It increases assets and decreases liabilities.

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Definitions:

Beginning Balance

The amount of money or value available in an account at the start of a new financial period.

Ending Balance

The amount of money or value in an account at the end of a financial period.

Cash Dividend

A payment made by a company out of its profits to its shareholders, usually in the form of cash.

Bonds Payable

Long-term liabilities represented by bonds that a company has issued, which it is obligated to pay back at a future date along with interest payments.