Transnational Company Just Started in Business and Was Looking for Additional

question 7

Multiple Choice

Transnational Company just started in business and was looking for additional capital in order to purchase a property to build their headquarters. They found an investor who was willing to sell them land worth $500,000 in exchange for stock in the company. How would this transaction be shown on the statement of cash flows?

• A) In the investing activities section
• B) In the noncash investing and financing activities section
• C) In the operating activities section
• D) In the financing activities section

---

Definitions:

Inventories

Assets held for sale, in the process of production for sale, or in the form of materials or supplies to be consumed in the production process.

Physical Capital Concept

The view that capital is a tangible asset, such as equipment or machinery, that is used in the production of goods and services.

Operating Capability

An entity's capacity to maintain the quality and level of its operations and services, often through efficient use and management of resources.