Brown Inc Owed One of Its Creditors $350,000, but It Did

question 128

Multiple Choice

Brown Inc. owed one of its creditors $350,000, but it did not have enough cash to repay the debt. Following lengthy negotiations, the parties agreed that Brown Inc. would issue 50,000 shares of Common Stock to settle the debt. How would this transaction be shown on the statement of cash flows?

• A)in the investing activities section
• B)in the financing activities section
• C)in the operating activities section
• D)in the non-cash investing and financing activities section

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Definitions:

Standard Deviations

Measures the amount of variation or dispersion from the mean in a set of data points.

Empirical Rule

A statistical rule stating that for a normal distribution, nearly all data will fall within three standard deviations (denoted as sigma) of the mean.

Numerical Descriptive Measures

Statistics that quantitatively describe or summarize features of a collection of information, such as mean, median, mode, and range.

Population Measurements

The process of obtaining and analyzing specific characteristics or parameters of a defined group of individuals to generalize findings.