Which of the Following Statements Regarding Financing Activities Is NOT

question 136

Multiple Choice

Which of the following statements regarding financing activities is NOT true?

• A) Cash dividends paid to a company's stockholders are reported as cash outflows from financing activities.
• B) When a company issues stock for cash, it reports a cash inflow from financing activities.
• C) When a company repurchases stock with cash, it reports a cash outflow for financing activities.
• D) When a company repays a loan, it reports a cash outflow from investing activities.

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Definitions:

Principals

Fundamental truths or propositions that serve as the foundation for a system of belief or behavior or for a chain of reasoning.

Agents

Individuals or companies authorized to act on behalf of another person or company in commercial transactions.

Payment Default

The failure to make a required payment on a loan or other debt obligation by the due date.

Loan Covenants

Agreements between a borrower and a lender that the borrower must comply with to remain in good standing.