Financing Activities Include Issuing and Repaying Debt, Loans Made and Collected

question 123

True/False

Financing activities include issuing and repaying debt, loans made and collected, issuing and repurchasing stock, and paying dividends.

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Definitions:

Pre-tax Income

Pre-tax Income is the amount of income earned by a business before any taxes have been deducted.

Contribution Margin

The sum by which the income from sales surpasses variable expenses, showing the extent to which revenue aids in covering fixed costs and generating profit.

High-low Method

A technique used in accounting and finance to estimate variable and fixed costs based on the highest and lowest levels of activity.

Variable Component

An element of cost or expense that varies directly with changes in production volume, business activity, or other drivers.