Which One of the Following Is Considered a Financing Activity

question 94

Multiple Choice

Which one of the following is considered a financing activity?

• A)The payment of interest on a note payable to the bank
• B)Selling products to customers
• C)Paying wages to employees
• D)The payment of a cash dividend

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Definitions:

Paid-In Capital

The sum of money contributed by investors through the issuance of common or preferred stocks, counting both the share's nominal value and any excess over that nominal value.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders but not retired, held in the company's treasury.

Net Income

Represents the amount of money that remains from revenues after all the firm's expenses, taxes, and costs are subtracted over a specific period.

Stockholders' Equity

Stockholders' Equity represents the ownership interest of shareholders in a corporation, calculated as the difference between total assets and total liabilities.