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 company issues debt for general operations, a

Finance Nov 13, 2020

 company issues debt for general operations, a. Share counts will decrease b. Impact on the balance sheet is not obvious c. A rapid and sudden increase across all lines of the income statement will appear. d. It can be hard to see, as identifying it is usually a process of elimination.

Expert Solution

The correct answer is Option B

The Debt for general operations are generally taken for short term duration to finance the short term obligations, If the debt is paid within one year then the effect of it will not be shown in the balance sheet, but if it is for more than 1 year, then it would appear in balance sheet, Therefore, the effect will not be obvious.

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