Which of the following transactions increase cash?
1)Convert debt to common stock
2)Credit sales
3)Increase long-term debt
4)Issue common stock
A)1 and 3
B)2 and 4
C)3 and 4
D)1,2,and 4
E)1,2,3,and 4

Question

Which of the following transactions increase cash? 
1)Convert debt to common stock
2)Credit sales
3)Increase long-term debt
4)Issue common stock
A)1 and 3
B)2 and 4
C)3 and 4
D)1,2,and 4
E)1,2,3,and 4

Quizplus · Accepted Answer

Transactions that increase cash include increasing long-term debt (3) because the company receives cash from the loan, and issuing common stock (4) because the company receives cash from investors in exchange for shares. Converting debt to common stock (1) and credit sales (2) do not directly increase cash.

Which of the Following Transactions Increase Cash