Purchasing Equipment by Issuing a Six-Month Note Should Be Shown

question 53

True/False

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

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Definitions:

Cash Dividend

A payment made in cash to shareholders that is derived from a company's profits or reserves.

Times Interest Earned Ratio

A financial metric assessing a company’s ability to meet its interest obligations from its operating income.

Income Tax Payments

Income tax payments are the amounts of money a company or individual must pay to the government, based on the income earned over a tax period.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debts.