If a Company Has Both an Inflow and Outflow of Cash

question 23

Multiple Choice

If a company has both an inflow and outflow of cash related to property plant and equipment the

• A) two cash effects can be netted and presented as one item in the investing activities section.
• B) cash inflow and cash outflow should be reported separately in the investing activities section.
• C) two cash effects can be netted and presented as one item in the financing activities section.
• D) cash inflow and cash outflow should be reported separately in the financing activities section.

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Definitions:

Escalation of Commitment

A pattern of behavior in which individuals or groups continue to invest in a decision despite evidence of its ineffectiveness, often due to cognitive biases.

Intuition

A cognitive process that enables people to make decisions without the use of analytical reasoning.

Escalation of Commitment

A behavioral phenomenon where an individual or group continues to invest in a decision despite evidence of its failure, often because of the resources already committed.

Support

Support refers to the assistance or backing provided by individuals or groups, intended to aid someone else's efforts or initiatives.