What Are Financing Activities

question 4

Multiple Choice

What are financing activities?

• A)Activities involving the acquisition and disposal of long-term assets.
• B)Activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.
• C)Activities involving the principal revenue-producing activities of the entity.
• D)Activities that do not involve cash.

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Definitions:

Separate Return Method

A tax filing strategy used by businesses operating in multiple states or countries, where each entity files its own tax return rather than a consolidated return for the entire group.

Income Tax Expense

The total amount of income tax owed to federal, state, and local tax authorities for the period.

Net Operating Loss Carryforward

A tax provision that allows a company to apply a fiscal year's net operating losses to future years' profits in order to reduce taxable income.

Consolidated Tax Returns

A single tax return filed by a parent company and its subsidiaries, treating them as one taxpayer.