[amp_mcq option1=”increases liabilities” option2=”increases equity” option3=”increases cash” option4=”decreases cash” correct=”option1″]<\/p>\n
The correct answer is: A. increases liabilities.<\/p>\n
When a company issues bonds or stocks, it is borrowing money from investors or selling a piece of ownership in the company. This increases the company’s liabilities, which are the debts that the company owes. The money that the company raises from issuing bonds or stocks is typically used to finance new projects or to pay down existing debt.<\/p>\n
Option B is incorrect because equity is the difference between a company’s assets and liabilities. When a company issues bonds or stocks, its equity does not change.<\/p>\n
Option C is incorrect because cash is a company’s most liquid asset. When a company issues bonds or stocks, it typically receives cash from investors or shareholders. However, this does not mean that the company’s cash balance will increase. The company may use the cash to finance new projects or to pay down existing debt.<\/p>\n
Option D is incorrect because issuing bonds or stocks typically increases a company’s liabilities.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”increases liabilities” option2=”increases equity” option3=”increases cash” option4=”decreases cash” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-48793","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n