The Following Item Would Be Classified as a Financing Activity

question 39

Multiple Choice

The following item would be classified as a financing activity on the statement of cash flows:

• A)Payments for inventory.
• B)Payment of dividends.
• C)Acquisition of land.
• D)Sales of goods.

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Definitions:

Assets

Resources owned by a business or individual deemed to have economic value and expected to provide future benefits.

Liabilities

Financial obligations or debts a company owes to others, due to be paid in the future.

Accounts Payable

describes the short-term liabilities a company owes to its suppliers or creditors for goods or services received but not yet paid for.

Accounts Receivable

The amount of money owed to a business by its customers for products or services that have been delivered but not yet paid for.