If a corporation shows a net loss on its income statement, which of the following is true?
A)The company may not be able to sell stock.
B)The company may continue to have a net increase in cash.
C)The company may not be able to pay dividends.
D)The company may continue to have an increase in retained earnings.

Question

Quizplus · Accepted Answer

A net loss on the income statement does not necessarily mean that the company's cash flow is negative. The company may still have a net increase in cash due to activities such as borrowing, issuing stock, or selling assets.

If a Corporation Shows a Net Loss on Its Income