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

question 16

Multiple Choice

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

• A)Retired company bonds before the maturity date by paying a negotiated amount
• B)Issued 10 000 shares at $5 per share
• C)Sold equipment with book value of $4 000 in exchange for $1 000 cash and a $3 000 bill
• D)Purchased land by signing an eight-year bill for $200 000

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, resulting in the average cost per unit of output decreasing with increasing scale.

Conglomerate Merger

A type of merger where two companies operating in unrelated business areas combine their operations.

Diversification

An investment strategy to reduce risk by allocating investments amongst various financial instruments, industries, or other categories.

Perspective of Stockholders

The viewpoint or interests of shareholders in a corporation, often focused on return on investment, governance, and financial health.