Allen Company Bought a New Copy Machine to Be Depreciated

question 45

Multiple Choice

Allen Company bought a new copy machine to be depreciated straight line for three years for use by sales personnel.Where would this purchase be reflected on the Statement of Cash Flows?

• A)It would be an expense on the income statement,so it would be reflected in operating cash flows.
• B)It would be an addition to property,plant and equipment,so it would be an investing activity.
• C)It would be an addition to cash,so would be reflected in the change in cash.
• D)It would be an increase in borrowing,so would be reflected in financing activities.
• E)It would be a change in inventory,so would be reflected in operating activities.

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Definitions:

Reference Groups

Groups that individuals compare themselves to for the purpose of evaluating their behaviors, attitudes, and beliefs.

Asch's Experiment

A social psychology experiment conducted by Solomon Asch, demonstrating the power of conformity in groups by studying how individuals would change their answers to conform with the group majority.

Group Pressure

The influence exerted by a group on individual members to conform to the group's norms, values, or behaviors.

Diverse Populations

Groups of people that differ in various characteristics such as cultural background, ethnicity, language, and socioeconomic status.