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Use the Equation Presented Below to Answer the Question That

Question 108

Multiple Choice

Use the equation presented below to answer the question that follows:  Cash =CL+LTL+CS+RENCCALTA where: CL= Current liabilities LTL= Long-term liabilities CS= Common stock RE= Retained earnings NCCA= Noncash current assets LTA= Long-term assets \begin{array} { l l } \text { Cash } = \mathrm { CL } + & \mathrm { LTL } + \mathrm { CS } + \mathrm { RE } - \mathrm { NCCA } - \mathrm { LTA } \\\text { where: } & \mathrm { CL } = \text { Current liabilities } \\& \mathrm { LTL } = \text { Long-term liabilities } \\& \mathrm { CS } = \text { Common stock } \\& \mathrm { RE } = \text { Retained earnings } \\& \mathrm { NCCA } = \text { Noncash current assets } \\& \mathrm { LTA } = \text { Long-term assets }\end{array} ? Which of the following activities results in a cash inflow?


A) Increases in noncash current assets (NCCA)
B) Decreases in current liabilities (CL)
C) Increases in common stock (CS)
D) Decreases in retained earnings (RE)

Correct Answer:

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