Consider the Following Transactions

question 16

Multiple Choice

Consider the following transactions:

Which of the above transactions do NOT increase revenue?

• A) (i) and (ii) only.
• B) (ii) and (iii) only.
• C) (i) and (iii) only.
• D) (i), (ii) and (iv).

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Definitions:

Operating Activities

Activities directly related to the production and delivery of goods and services, which are central to a company's operations and cash flow.

Residual Value

The estimated amount that an asset is expected to be worth at the end of its useful life.

Straight-Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Depreciable Asset

An asset that loses value over time due to wear and tear, and its cost is expensed across its useful life.