Which of the Following Transactions Would Be Shown in the Non-Cash

question 63

Multiple Choice

Which of the following transactions would be shown in the non-cash investing and financing activities section of the statement of cash flows?

• A) sold equipment with book value of $6,500 in exchange for $6,500 cash
• B) settled a long-term note payable by issuing common stock
• C) issued 20,000 shares of stock at $4 per share
• D) purchased land for $30,000 cash

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Definitions:

Budgetary Slack

The intentional underestimation of revenues and/or overestimation of expenses in a budget to create the appearance of having less money available than might actually be available.

Padding

The practice of inflating estimates or financial figures to create a buffer for unexpected costs or to create the appearance of greater value.

Static Budget

A fixed budget that does not change or adjust to variations in business activity levels, often used for control purposes in stable environment operations.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level.