Which of the Following Would Result When a Company Purchases

question 65

Multiple Choice

Which of the following would result when a company purchases a factory building using cash?

• A)A noncurrent asset and an investing cash flow are created.
• B)A noncurrent asset and a financing cash flow are created.
• C)A current asset and an investing cash flow are created.
• D)A current asset and a financing cash flow are createD.Buildings are classified as noncurrent assets.Investing cash flows are created with the purchase or sale of noncurrent assets.

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Definitions:

Employee Wages

Compensation paid to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis.

Cash Flow from Operating Activities

A measure of the cash generated by a company's normal business operations.

Cash Paid

Money that a company spends during a period for operating activities, investments, and financing activities, excluding non-cash transactions.

Dividends to Stockholders

Payments made to shareholders out of a corporation's profits as a reward for investing in its shares.