A Software Company Acquires a Smaller Company in Order to Acquire

question 26

Multiple Choice

A software company acquires a smaller company in order to acquire the patents that it holds. Where will the cost of this acquisition be recorded on the statement of cash flows?

• A) as an outflow under operating activities
• B) as an outflow under investment activities
• C) as an outflow under financial activities
• D) not recorded on the statement of cash flows

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Definitions:

Unstable Nucleus

An atomic nucleus that has excess energy and is in a state where it can undergo radioactive decay to reach a more stable form.

Stable Nucleus

An atomic nucleus that is not prone to radioactive decay and remains unchanged over time.

Earth's Crust

The outermost solid shell of the planet, known for being the layer on which we live and where most geological events occur.

Synthetic Substances

Artificial materials created through chemical processes, not found naturally.