An Example of a Non-Cash Investing or Financing Activity That

question 34

Multiple Choice

An example of a non-cash investing or financing activity that is disclosed in a supplementary schedule accompanying the statement of cash flows is:

• A)Recording depreciation expense for the current year.
• B)Declaring,but not paying,dividends on common stock.
• C)Selling land in exchange for a note receivable.
• D)Transferring cash from a checking account into a money market fund.

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Definitions:

Capital Allocation Line

A graphical representation used in finance to show possible rates of return for portfolios with different levels of risk.

Lending Rate

The interest rate charged by banks on loans extended to clients.

Borrowing Rate

The interest rate that a borrower is charged for the use of borrowed funds, typically expressed as an annual percentage.

Capital Allocation Line

A graph showing risk-return trade-offs of different portfolios, with risk measured on the x-axis and expected return on the y-axis, aiming to optimize portfolio allocation.