Which of the Following Would Result When a Company Purchases

question 135

Multiple Choice

Which of the following would result when a company purchases a factory building using cash?

• A)A noncurrent asset and an investing cash flow are created.
• B)A noncurrent asset and a financing cash flow are created.
• C)A current asset and an investing cash flow are created.
• D)A current asset and a financing cash flow are created.

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Definitions:

Output Market

The marketplace in which goods and services produced by businesses are sold or offered to end users or consumers.

U.S.GAAP

United States Generally Accepted Accounting Principles, a standard framework of accounting rules for financial reporting.

Long-lived Asset

An asset with a useful life longer than one year, typically including property, plant, and equipment, used in the operation of a company.

GAAP

The standard set of guidelines for financial accounting known as Generally Accepted Accounting Principles, used primarily within the United States and other jurisdictions.