AICPA Exam CPA-Business Topic 2 Question 51 Discussion

Actual exam question for AICPA's CPA Business Environment and Concepts exam

Question #: 51
Topic #: 2

[All CPA Business Environment and Concepts Questions]

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

ARemains unchanged and the current ratio remains unchanged.

BIncreases and the current ratio remains unchanged.

CIncreases and the current ratio decreases.

DIncreases and the current ratio increases.

Show Suggested 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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