Which Statement Concerning the Treatment of the Purchase and Sale

question 32

Multiple Choice

Which statement concerning the treatment of the purchase and sale of non-current assets in a statement of cash flows is incorrect?

• A) The carrying value of a non-current asset that has been sold is treated as an investing outflow.
• B) The proceeds of sale from a non-current asset are treated as an investing inflow.
• C) The cash purchase of a non-current asset is treated as an investing outflow.
• D) Inflows and outflows for the purchase and sale of non-current assets must not be netted off against each other.

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Definitions:

Regulatory Capture

A form of government failure that occurs when a regulatory agency tasked with acting in the public's interest instead acts in favor of the commercial or special interests of the industry or sector it is charged with regulating.

Global Competitiveness

The ability of a country or company to compete effectively and successfully in international markets.

Consumer Safety

Measures and regulations aimed at preventing harm to consumers and ensuring that the products they use are free from dangerous defects.

Rent Seeking

An economic concept referring to the practice of individuals or firms using their resources to gain government favors or advantages without creating new wealth, often through lobbying or other non-productive means.