Which of the Following Items Is Reported on the Statement

question 200

Multiple Choice

Which of the following items is reported on the statement of cash flows under financing activities?

• A)Purchase of equipment for cash.
• B)Payment of a cash dividend.
• C)Payment for merchandise.
• D)Payment of a stock dividend.
• E)Stock split.

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Definitions:

Right of First Refusal

A contractual right that gives its holder the option to enter a business transaction with the owner of something, before the owner is entitled to enter into that transaction with a third party.

Limited Liability

A form of legal protection for shareholders and owners that limits their losses to the amount of investment in the company, protecting personal assets from company debts and liabilities.

Double Taxation

Double Taxation is a tax principle referring to income taxes being paid twice on the same source of earned income. It can occur when income is taxed at both the corporate level and personal level, or in two different countries.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders; it has rights and liabilities independent of those owners and can enter into contracts, sue, and be sued.