Which of following best describes the increase in equity expands___________?
Correct answer: C. Business operations
- A. Inflows of cash
- B. cash outflows
- C. Business operations
- D. Appropriation expenses
Explanation
An increase in equity normally provides additional resources to the business, allowing it to expand its operations. It does not itself mean that cash outflows or appropriation expenses have increased.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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