Which of the Following Is a Noncash Investing and Financing

question 65

Multiple Choice

Which of the following is a noncash investing and financing activity?

• A) payment of a cash dividend
• B) payment of a six-month note payable
• C) purchase of merchandise inventory on account
• D) issuance of common stock to acquire land

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Definitions:

Offsetting Errors

Offsetting errors occur when two or more accounting mistakes cancel each other out, resulting in no net effect on the financial statements.

Trial Balance

A trial balance is a bookkeeping report that lists the balances of all ledgers accounts in two columns, debits and credits, ensuring that total debits equal total credits.

Accounts Payable

Liabilities to creditors for goods or services that have been received but not yet paid for.

Credit

An accounting entry that increases liabilities or equity or decreases assets, representing a transfer of value in financial transactions.