Land Was Purchased with the Proceeds from the Issuance of Common

question 118

Multiple Choice

Land was purchased with the proceeds from the issuance of common stock. This transaction would be reported on the statement of cash flows as a(n) :

• A) operating activity.
• B) investing activity.
• C) financing activity.
• D) noncash investing and financing activity.

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Definitions:

Output Effect

The possibility that when the price of the first of a pair of substitute resources falls, the quantity demanded of both resources will increase.

Present Consumption

The use of goods and services for immediate satisfaction or needs, as opposed to saving for future use.

Loanable Funds

The supply of available capital in the financial markets for borrowing, which can be used for investment purposes by individuals and businesses.

Future Consumption

The use of goods or services at a later date, often facilitated by saving or investing in the present.