Asked by Andrew Bigalow on May 31, 2024
Verified
Which one of the following transactions should be classified as a financing activity on the statement of cash flows?
A) Purchase of equipment.
B) Purchase of the company's own stock.
C) Sale of a long-term investment.
D) Payment of interest to a lender.
Financing Activity
Transactions and events whereby resources are obtained from, or repaid to, owners (equity financing) and creditors (debt financing).
Purchase
The act of acquiring goods or services in exchange for money, constituting a fundamental business transaction.
Company's Own Stock
Shares of its own stock that a company has bought back from shareholders and holds in its treasury.
- Pinpoint the cash movements related to activities of financing.
Verified Answer
Learning Objectives
- Pinpoint the cash movements related to activities of financing.
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