If a Company Has Both an Inflow and Outflow of Cash

question 102

Multiple Choice

If a company has both an inflow and outflow of cash related to the acquisition of equipment for $15,000 cash and the sale of machinery for $10,000 cash, the

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

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Definitions:

Formalized Rules

Officially established regulations and procedures that are defined and enforced by an organization or institution to guide behavior and operations.