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AICPA CPA-Business Exam - Topic 2 Question 51 Discussion

If a firm increases its cash balance by issuing additional shares of common stock, working capital:
D) Increases and the current ratio increases.
A) Remains unchanged and the current ratio remains unchanged.
B) Increases and the current ratio remains unchanged.
C) Increases and the current ratio decreases.

AICPA CPA-Business Exam - Topic 2 Question 51 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 51
Topic #: 2
[All CPA-Business Questions]

If a firm increases its cash balance by issuing additional shares of common stock, working capital:

Show Suggested Answer Hide Answer
Suggested Answer: D

Choice 'd' is correct. If a firm increases its cash balance by issuing additional shares of common stock, working capital increases and the current ratio increases.


by Stephaine at May 09, 2022, 01:33 PM

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Tricia
8 months ago
B sounds right too, but I’m leaning towards A.
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Carmen
9 months ago
I think D makes more sense, working capital should increase current ratio!
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Dion
9 months ago
Wait, how can working capital stay the same? That seems off.
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Regenia
9 months ago
Totally agree with A, no change in current ratio!
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Rosendo
9 months ago
A is correct, cash balance goes up but working capital stays the same.
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Rosalind
9 months ago
Okay, let me see... Android apps don't have access to protected resources by default, so I think the answer is True. I'll double-check that, but I'm feeling good about this one.
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Domitila
9 months ago
Okay, I think I know the answer here. The database link is failing to use the stored credentials, so the change needs to be made on the client side of the server where the database link is defined, which is server A.
upvoted 0 times
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Jerry
10 months ago
Wait, is the exposure factor a percentage or a decimal? I'm getting a different result depending on how I interpret that.
upvoted 0 times
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