Which of the Following Transactions Increases Both Cash and Net

question 124

Multiple Choice

Which of the following transactions increases both cash and net income?

• A)Cash receipts from a bank loan.
• B)Cash receipts from sale of common stock.
• C)Cash receipts from customers for services provided.
• D)Cash receipts from cost of goods solD.Net income is the result of revenues less cost of goods sold and other expenses.Cash receipts from customers increases revenue, which flows through to an increase in net income.Cash receipts also increase the cash account.

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Definitions:

Treynor's Measure

A performance metric for determining how well an investment compensates the investor for taking a risk, considering the risk-free rate.

Risk-Free Return

The theoretical return on an investment with no risk of financial loss.

Wildcat Fund

A type of investment fund that takes on high-risk investments, hoping for significantly higher-than-average returns.

M2 Measure

A broad measurement of a country's money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits and money market securities.