Long-term debt on the balance sheet increased by $100,000 and dividends payable increased by $50,000.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 $100,000.
D) Cash decreased by $150,000.

Question

Quizplus · Accepted Answer

The increase in long-term debt by $100,000 represents a cash inflow, while the increase in dividends payable does not affect cash flow immediately. Therefore, the net result is an increase in cash by $100,000.

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