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Questions and Answers
Which of the following best defines the transaction motive?
Which of the following best defines the transaction motive?
- The need for cash to cover day-to-day business expenses like salaries, rent, and purchases (correct)
- The need for cash to distribute dividends to shareholders
- The need for cash to pay off debts
- The need for cash to invest in long-term projects
What are some examples of cash outflows related to the transaction motive?
What are some examples of cash outflows related to the transaction motive?
- Payment of salary, rent, labor payment, and purchase of goods (correct)
- Payment of dividends, interest, and taxes
- Purchase of long-term assets and investments
- Payment of debts and loans
What are some examples of cash inflows related to the transaction motive?
What are some examples of cash inflows related to the transaction motive?
- Cash received from investments and dividends
- Cash received from borrowing loans
- Cash received from selling long-term assets
- Cash received from sale of goods and debtors (correct)
