Which of the Following Will Be Categorized as an Investing

question 109

Multiple Choice

Which of the following will be categorized as an investing activity on the statement of cash flows?

• A) Purchase of land with a mortgage
• B) Cash paid for purchase of new machinery
• C) Cash paid for purchase of office supplies
• D) Cash contribution by owner

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Definitions:

Return On Equity Ratio

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company uses investments to generate earnings growth.

Financial Statements

Official records that outline the financial activities and condition of a business, individual, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Common Shares

Common shares represent ownership in a company and provide shareholders with voting rights and dividends, subject to corporate profitability and decision of the board.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its debt obligations based on its earnings before interest and taxes (EBIT).