Which of the Following Transactions Would Be Reported in the Cash

question 39

Multiple Choice

Which of the following transactions would be reported in the cash flow statement as a cash flow from financing activities?

• A)The cash payment of interest expense.
• B)Acquiring land by signing a note payable.
• C)Paying cash to stockholders for dividends.
• D)Purchasing shares of stock of another company using cash.

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Definitions:

Financial Condition

An overview of a company's financial health, including assets, liabilities, equity, income, and cash flows.

Market Value

The current price at which an asset or service can be bought or sold in an open market.

Book Value

The net value of an asset, calculated as its original cost minus depreciation, amortization, or impairment costs.

Acid-Test Ratio

A stringent indicator of a company's liquidity, measuring its ability to cover short-term liabilities with its most liquid assets.