Which of the Following Statements Is True

question 28

Multiple Choice

Which of the following statements is true?

• A) A cash dividend is an operating cash outflow.
• B) Cash paid to repurchase treasury stock is an investing cash outflow.
• C) Cash paid to acquire stock in another company is a financing outflow.
• D) Purchase of a patent is an investing cash outflow.

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Definitions:

Paid-In Capital

The total amount of capital provided to a company by its shareholders through the purchase of stock above its par value.

Cash Dividends

Distribution of financial gains by a company to its shareholders, commonly from net profits.

Market Price

Market price is the current price at which an asset or service is traded in the open market, reflecting what buyers are willing to pay and sellers are willing to accept.

Creditors

Individuals or entities to whom a debt is owed by another party, often tied to credit transactions or loan agreements.