Which of the Following Statements Is Correct

question 40

Multiple Choice

Which of the following statements is correct?

• A)The payment of a cash dividend reduces net income.
• B)Cash received from issuing common stock to stockholders is reported as a financing activity cash flow within the statement of cash flows.
• C)Providing services to a customer on account does not impact net income.
• D)The purchase of manufacturing equipment is reported within the statement of cash flows as a financing activity.

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Definitions:

Strikes

Work stoppages initiated by employees as a form of protest against their employers to achieve certain goals, such as higher wages or better working conditions.

Lockouts

Actions taken by employers to prevent employees from working as a strategy in labor disputes, typically during negotiations for better terms or conditions.

Picketing

The act of standing or marching outside a place of work or another location as a form of protest, often by workers during a strike.

Preferred Shares

Shares giving the shareholder preference over other classes of shares; that preference often pertains to the payment of dividends.