The Following Information Should Be Used to According to the Provisions

question 63

Multiple Choice

The following information should be used to according to the provisions of GAAP (Statement of Cash flows) and using the following data. $$\begin{array} { l r } \text { Net income } & \$ 50,000 \\\text { Provision for bad debts } & 2,000 \\\text { Increase in inventory } & 1,000 \\\text { Increase in accounts payable } & 2,000 \\\text { Purchase of new equipment } & 15,000 \\\text { Sale of equipment for } \$ 10,000 \text { gain } & 20,000 \\\text { Depreciation expense } & 5,000 \\\text { Repurchase of common stock } & 10,000 \\\text { Payment of dividend } & 4,000 \\\text { Interest payment } & 3,000\end{array}$$
-What is net cash flow from financing?

• A)$6,000
• B)$3,000
• C)($14,000)
• D)($17,000)

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Definitions:

Medium of Exchange

An intermediary used in trade to avoid the inconveniences of a pure barter system.

Specialization in Production

The process by which individuals, businesses, or countries focus on producing a limited scope of goods or services to gain greater efficiency and quality.

Coincidence of Wants

A situation in a barter economy where two parties each hold an item the other wants, facilitating a direct trade without the need for a medium of exchange.

Barter Economy

An economic system where goods and services are exchanged directly for other goods and services without using money as an intermediate.