Question

The term "spontaneously generated funds" generally refers to increases in the cash account that result from growth in sales, assuming the firm is operating with a positive profit margin.

a. True
b. False

Answer 1

i think that statement would be false

The term "spontaneously generated funds" generally refers to funds that a firm must raise externally.
The way they did this is could either by:
- issuing a bond payable and promise to pay up an interest rate in return
- Sell out their ownership of the company in the form of stocks.