Which of the Following Statements Is True

question 141

Multiple Choice

Which of the following statements is true?

• A)Purchase of equipment is a cash outflow for investing activities.
• B)Amortization expense is added to cash from financing activities.
• C)Cash received from accounts receivable is a cash inflow from financing.
• D)Purchase of treasury stock is a cash outflow for operating activities.

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Definitions:

Depreciable Cost

The total amount that an asset’s value can be depreciated over its useful life, excluding salvage value.

Salvage Value

The conjectured remain value of an asset at the end of its productive life.

Straight-Line Method

A technique for determining depreciation or amortization by equally distributing an asset's cost throughout its lifespan.

Salvage Value

An asset’s expected trade-in value at the point it concludes productive life.