If Common Stock Was Issued to Acquire an $8,000 Machine

question 12

Multiple Choice

If common stock was issued to acquire an $8,000 machine, how would the transactionappear on the statement of cash flows?

• A) It would depend on whether you are using the direct or the indirect method.
• B) It would be a positive $8,000 in the financing section and a negative $8,000 in the investing section.
• C) It would be a negative $8,000 in the financing section and a positive $8,000 in the investing section.
• D) It would not appear on the statement of cash flows but rather on a schedule of noncash investing and financing activities.

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Definitions:

Toe

In automotive terms, the angle at which the wheels of a vehicle tilt inward or outward from a vertical position, affecting steering and tire wear.

Dampers

Components of a vehicle's suspension system designed to absorb and dampen shock impulses to provide a smoother ride.

Bounce Test

A quick diagnostic procedure used to check the suspension and shocks of a vehicle, where pressure is applied to the body and released to observe how the vehicle rebounds.

Camber

The angle of the wheels relative to the vertical direction of the car, affecting tire contact with the road and wear patterns.