Which of the Following Transactions Would Not Create a Cash

question 130

Multiple Choice

Which of the following transactions would not create a cash flow?

• A) The company purchased some of its own stock from a stockholder.
• B) Payment of a dividend.
• C) The company purchased land by issuing common stock.
• D) Sale of equipment at book value.

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Definitions:

Voucher System

A method for processing accounts payable where a document (voucher) is prepared for every payable transaction, detailing the goods or services received, amounts to be paid, authorization, and accounts to be charged.

Net Method

An accounting method for recording purchases at the net of any trade discounts or rebate.

Discount Period

The amount of time the bank holds a note that was discounted until the maturity date.

Voucher System

A control mechanism in accounting that uses vouchers to record transactions and control disbursements.