A Transaction That Would Appear as an Application of Funds

question 23

Multiple Choice

A transaction that would appear as an application of funds on a conventional funds statement using the all-financial-resources concept, but not on a statement using the traditional working capital concept would be the

• A) Acquisition of property, plant, and equipment for cash
• B) Reacquisition of bonds issued by the reporting entity
• C) Acquisition of property, plant, and equipment with an issue of common stock
• D) Declaration and payment of dividends

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Definitions:

Small Businesses

Enterprises characterized by a small number of employees, limited revenue, and relatively smaller scale of operations.

High Cost

A situation or item that requires a substantial amount of financial resources or expenditure.