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:

Common Stock Account

An equity item on the balance sheet representing funds raised by issuing common shares.

Current Market Price

The price at which an asset or security is traded in the market at the present moment.

Current Liabilities

Obligations or debts of a company that need to be settled with creditors within a twelve-month period.

Twelve Months

A period of one year, often used in financial statements to provide a snapshot of a company's performance.