Long-term debt on the balance sheet increased by $100,000 and $50,000 in cash dividends were paid.What will be the net result in cash flow?
A) Cash increased by $50,000.
B) Cash decreased by $50,000.
C) Cash increased by $150,000.
D) Cash decreased by $150,000.

Question

Quizplus · Accepted Answer

The increase in long-term debt by $100,000 results in a cash inflow, while the payment of $50,000 in cash dividends results in a cash outflow. The net effect is an increase in cash by $50,000 ($100,000 inflow - $50,000 outflow).

Long-Term Debt on the Balance Sheet Increased by $100,000 and $50,000