What Is a Financing Activity

question 5

Multiple Choice

What is a financing activity?

• A)Activities involving the acquisition and disposal of long-term assets.
• B)Activities involving redemption of the contributed equity of an entity.
• C)Activities involving the principal revenue-producing activities of the entity.
• D)Activities that do not involve cash.

---

Definitions:

Common Stock

Equity ownership in a corporation, with rights to vote on corporate matters and to receive dividends.

Cash Dividends

Cash Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or the wear and tear over time.

Long-Term Debt

Loans and financial obligations lasting more than one year, used to finance a company's operations or expansions.