In the Context of a Firm's Statement of Cash Flows

question 21

Multiple Choice

In the context of a firm's statement of cash flows, ________ activities include the purchase, sale, or investment in fixed assets (e.g., real estate, equipment, and buildings) .

• A) operating
• B) investing
• C) capital
• D) financing
• E) liquidity

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Definitions:

Warrants

Legal documents issued by a court or government authority that give law enforcement the power to perform certain actions, such as arrests or searches; also refers to financial instruments granting the right to purchase stock at a specified price.

De Facto Corporation

A business entity that operates like a corporation without formal incorporation status, but is treated as a corporation by law under certain conditions.

Incorporation Statute

Laws and regulations governing the process of establishing a corporation and outlining its legal status and structure.

Corporation by Estoppel

A principle where a company is treated as if it is incorporated for purposes of a particular transaction, even though it technically may not be, to prevent injustice or unfairness.