Asked by Jonah Marukot on Jun 14, 2024
Verified
Statement I.The purchase of 100 shares of Apple Corporation stock adds directly to plant and equipment.
Statement II.The purchase of 100 shares of Apple Corporation stock is not an investment,but merely a financial transaction.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Financial Transaction
An agreement, communication, or movement of funds between two parties that results in the exchange of financial instruments.
- Differentiate between financial transactions and physical investments.
Verified Answer
AR
Arounda RileyJun 21, 2024
Final Answer :
B
Explanation :
Statement I is false because purchasing stocks does not directly add to plant and equipment. Statement II is true because purchasing stocks is a financial transaction and not an investment in the sense that it does not involve acquiring ownership or control over the company's operations.
Learning Objectives
- Differentiate between financial transactions and physical investments.