Which of the Following Items Is Classified as a 'Financing

question 14

Multiple Choice

Which of the following items is classified as a 'financing activity' in the Statement of Cash Flows?

• A) Cash payment on redemption of the company's debentures.
• B) Cash payment to purchase debentures of another entity.
• C) Cash received from accounts receivable.
• D) Impairment losses.

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Definitions:

Accounting Principles

Fundamental guidelines or rules that underpin the process of accounting, including concepts like the matching principle, revenue recognition, and historical cost.

Short-term Creditors

Lenders or entities from whom a company has borrowed money or resources that are to be repaid within one year.

Liquidity

The ability of an asset to be quickly converted into cash or an entity's capacity to meet its immediate and short-term obligations.

Unusual Items

Non-recurring or uncommon transactions that are outside the usual business operation, which might distort the financial statements if not separately disclosed.