Which of the Following Transactions Would Not Be Reported as a Cash

question 52

Multiple Choice

Which of the following transactions would not be reported as a cash flow from investing activities?

• A)Selling a depreciable asset for cash at a loss.
• B)Purchasing a patent using cash.
• C)Purchasing land in exchange for stock.
• D)Purchasing shares of stock of another company using cash.

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed costs in a company's cost structure.

Forecasting Risk

The risk associated with the potential for actual results or outcomes to differ significantly from forecasted or expected results.

Operating Leverage

The degree to which a company or project can increase operating income by increasing revenue, emphasizing the fixed versus variable costs structure.

Break-Even Point

The sales level at which a company neither makes a profit nor incurs a loss.