Which of the Following Would Give Rise to an Outflow

question 5

Multiple Choice

Which of the following would give rise to an outflow of cash during a financial year?

• A) An issue of ordinary shares.
• B) Taking out a loan
• C) The purchase of non-current assets.
• D) An increase in trade payables.

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Definitions:

Equity and Debt

The two main types of financing for companies: equity represents ownership (stocks), and debt represents borrowed funds (bonds or loans) that must be repaid.

Tax Deductible

Costs that can be deducted from total income to lower the taxable income amount.

Return to Equity

The amount of net income returned as a percentage of shareholders equity.

Operating Income

Income generated from regular business operations, excluding expenses such as taxes and interest payments.