Which of the Following Statements Is False

question 50

Multiple Choice

Which of the following statements is false?

• A) Purchase of equipment is an investing cash outflow.
• B) Sale of equipment creates investing cash outflow equal to its selling price.
• C) Purchase of short-term investments is an investing cash outflow.
• D) Purchase of a patent is an investing cash outflow.

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Definitions:

Distribution Of Remaining Cash

The allocation of left-over cash to shareholders or for other corporate purposes after settling all obligations and investments.

Liquidation

Liquidation is the process of selling off a company's assets to pay off its debts and liabilities, typically occurring when a company is insolvent or ceasing operations.

Mutual Agency

A principle of partnership where each partner is both an agent and a principal, legally authorized to make business decisions and transactions that can bind the partnership.

Business Operations

Activities involved in the day-to-day functions of a business related to producing and delivering products or services.