Cash account is primarily affected by which transactions in the capital acquisition and repayment cycle?
A) issue of shares
B) payment of dividends
C) both A and B
D) none of the above

Question

Quizplus · Accepted Answer

Both the issue of new shares and payment of dividends involve cash transactions and will impact the cash account in the capital acquisition and repayment cycle. When shares are issued, cash is received from the investors, increasing the cash balance. Similarly, when dividends are paid to shareholders, cash is paid out, decreasing the cash balance. Therefore, both A and B will affect the cash account in the capital acquisition and repayment cycle.

Cash Account Is Primarily Affected by Which Transactions in the Capital