Which of the Following Transactions Is Not a Significant Noncash

question 56

Multiple Choice

Which of the following transactions is not a significant noncash investing and financing activity?

• A)Land is purchased by issuing a 20-year mortgage note payable.
• B)Bonds are issued to purchase a building.
• C)Cash equivalents are purchased.
• D)Buildings are acquired by issuing common stock.

---

Definitions:

Asset Test

A measure used to evaluate a company's ability to meet its short-term liabilities with its most liquid assets.

Profit (Loss) Test

A financial assessment to evaluate the profitability or loss of a business operation or investment.

Return on Total Assets

A financial ratio that measures a company's profitability relative to its total assets.

Income Tax Expense

The amount of money that a company is required to pay to the government based on its taxable income.