Which One of the Following Transactions Should Be Classified as a Financing

question 144

Multiple Choice

Which one of the following transactions should be classified as a financing activity on the statement of cash flows?

• A) Purchase of equipment.
• B) Purchase of the company's own stock.
• C) Sale of a long-term investment.
• D) Payment of interest to a lender.

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Definitions:

Terms

In a legal contract, terms are the specific details, conditions, and stipulations that are agreed upon by the parties involved.

Catalogue Price

The price of items as listed in a catalogue, often suggesting retail pricing before any discounts.

Offer to Purchase

A formal proposal to buy a property or asset, typically including terms and price.

Offeree Dies

The cessation of an offer in contract law due to the death of the offeree, rendering the offer void.