Last year Roussakis Company's operations provided a negative net cash flow,yet the cash shown on its balance sheet increased.What action could explain the increase in cash,assuming the company's financial statements were prepared under generally accepted accounting principles?

Question

Quizplus · Accepted Answer

The increase in cash on the balance sheet could be explained by the sale of fixed assets. This would generate cash inflow and may have offset the negative net cash flow from the company's operations. Repurchasing common stock or retiring long-term debt would have used cash, while high depreciation expenses would not directly impact cash flow.

Last Year Roussakis Company's Operations Provided a Negative Net Cash