Which of the Following Would Be Considered a Financing Activity

question 162

Multiple Choice

Which of the following would be considered a financing activity that decreases cash on the statement of cash flows?

• A)The company pays a long-term loan.
• B)The company sells common stock.
• C)The company purchases a building.
• D)The company pays its monthly utility bill.

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Definitions:

Excise Tax

A tax imposed on specific goods, services, or activities, often aimed at discouraging their use or raising revenue for government.

Price Elasticity

A measure of the sensitivity of demand or supply for a product or service to changes in its price.

Incidence

The measure or rate at which a particular phenomenon occurs, often used in the context of disease or taxation.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied reacts to the smallest change in price with an infinite amount of change in quantity.