Which One of the Following Transactions Is an Investing Activity

question 70

Multiple Choice

Which one of the following transactions is an investing activity?

• A)Sale of equipment at book value
• B)Sale of merchandise on credit
• C)Declaration of cash dividend
• D)Issuance of bonds payable at a discount

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Definitions:

Machine Hour

A unit of measure representing an hour of operation of a machine, used in calculating the cost of running machinery for manufacturing.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales.

Selling Price

The amount of money a buyer pays to purchase a product or service.

Target Cost

The maximum amount that can be spent on developing a product or service, while still earning the desired profit margin.