Which of the Following Transactions Would Not Create a Cash

question 56

Multiple Choice

Which of the following transactions would not create a cash flow from operating activities?

• A)Collecting cash from a customer.
• B)Paying cash to a supplier.
• C)Paying cash to stockholders for dividends.
• D)Paying cash for a utility bill.

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Definitions:

Contractual Capacity

The legal ability of a person to enter into a binding contract.

Lawful Purpose

Involves activities or objectives that are not illegal or prohibited by law, often a prerequisite in contract law to ensure that the contract’s intent complies with legal standards.

Agency Relationship

A legal relationship between two parties, where one (the agent) is authorized to act on behalf of the other (the principal) in legal or business dealings.

Specific Power

Authority granted to an individual or body to carry out specific actions in a designated context or situation.